When it comes to the intricate process of buying and selling a home, there’s a myriad of expenses to consider, including legal fees. It’s easy to lose track of who bears what costs in this complex transaction.
For sellers, these costs can be substantial and often include:
- Bond Cancellation: In South Africa, selling a home involves bond cancellation overseen by the bank-appointed bond attorney. This process incurs various costs for sellers:
- Penalty fee for failing to provide 90 days written notice to the bank of the intention to sell the home.Penalty for canceling the bond within two years into the 20 or 30-year loan period.Homeowners’ and life insurance premiums debited to the bond account within the next six months.Expected costs: Bond cancellation penalties can vary, but sellers should budget for potential penalties ranging from R5,000 to R10,000.
- Rates, Taxes, and Levies: Sellers are required to cover three to six months’ worth of rates and taxes to the local council to ensure a seamless transition. Any surplus paid due to an early transfer of ownership warrants a refund. Additionally, sellers of properties under an estate or sectional title may need to prepay levies to the homeowners’ association.
- Expected costs: Rates, taxes, and levies typically range from R15,000 to R30,000, depending on the property and location.
- Expected costs: Rates, taxes, and levies typically range from R15,000 to R30,000, depending on the property and location.
- Compliance Certificates: Sellers must obtain various compliance certificates, including electrical, gas, plumbing, and more, through inspections by licensed professionals. Costs for these certificates vary, and sellers should budget for potential repair expenses if any faults are found during the inspection.
- Expected costs: Compliance certificates can range from R400 to R1,000 per certificate, with potential repair costs adding up to R5,000 or more.
- Expected costs: Compliance certificates can range from R400 to R1,000 per certificate, with potential repair costs adding up to R5,000 or more.
- Estate Agent Fees: Employing an estate agent, recommended for their expertise, typically incurs a commission ranging from 5 to 7% of the selling price. While estate agents primarily assist sellers, their negotiation skills can secure favorable deals for both parties.
- Expected costs: Estate agent fees typically range from R50,000 to R70,000 for a property sold at R1,000,000.
- Expected costs: Estate agent fees typically range from R50,000 to R70,000 for a property sold at R1,000,000.
- Repairs and Maintenance: Sellers are responsible for addressing defects uncovered during home inspections, including both latent and patent defects.
- Patent Defects: These are defects that are visible upon casual inspection of the home, such as broken windows, cracks in the wall, and rotting woodwork.
- Latent Defects: These are defects that become evident further down the line, such as leaks, faulty geysers, and rusting pipes. Sellers can only be held liable for latent defects if the buyer can prove they were hidden.
- Expected costs: Repair costs can vary significantly depending on the extent of defects, ranging from a few thousand to tens of thousands of rand.
- Moving Costs: Often overlooked but significant, sellers should allocate funds for professional moving services to streamline the relocation process and minimize stress.
- Expected costs: Moving costs can range from R5,000 to R20,000, depending on the distance and volume of belongings.
- Expected costs: Moving costs can range from R5,000 to R20,000, depending on the distance and volume of belongings.
- Temporary Accommodation: Budgeting for interim housing between selling the old home and settling into the new one is essential to avoid financial strain during the transition period.
- Expected costs: Temporary accommodation expenses can vary widely based on location and duration, ranging from R5,000 to R20,000 or more.
Once the sale is finalized, sellers receive the equity in their home, usually transferred electronically into their bank accounts within 24 to 48 hours by the transferring attorney. With these funds, sellers can explore various options, such as using equity to purchase a new home.
For those navigating this process, ooba Home Loans, South Africa’s premier home loan comparison service, can assist in securing the best deals across multiple banks, ensuring informed decision-making in the next stage of homeownership.