Preparing to sell your property? We take a look at some of the costs you need to be ready for when selling your home.
1. Bond cancellation
If there is a bond on the property that is being sold, you should expect to pay a cancellation fee.
Notice should be given to your bank at least 90 days in advance, before consolidating your bond in full as a result of sale, or risk incurring a notice period penalty.
The seller is also likely to incur costs related to the transfer of the property. However, this tends only to happen if you wait until the sale of your property has been finalised before notifying the bank, as you may then be liable for the penalty interest.
2. Compliance certificates
Compliance certificates, including electrical, plumbing, gas, beetle and electric fencing, are the seller's responsibility to obtain and pay for. All compliance must be in order before the property transfer can take place.
It would be prudent to budget for around R1000 for each. We also suggest budgeting for any faults that those inspections might reveal, as they would need to be fixed before the compliance certificates can be issued.
3. Rates, taxes, and levies
The conveyancing attorneys handling the transfer of the property will require a clearance certificate from the local authorities stating that all rates and taxes are fully paid.
You may be required to make future-dated payments between two and six months in advance. The amount will be an approximation based on past accounts and can be a large sum. As such, it is advisable for the seller to make provision for this cost as soon as the property goes on the market.
In the case of sectional title properties, the homeowners' association may require you to pay the levies a few months in advance to ensure all costs are covered while the property transfer is in process.
4. Agent commission
The commission an agent earns on the sale of a property is for the seller's account and is calculated as a percentage of the purchase price.
Commission is the remuneration for a professional service rendered, which includes access to expert property knowledge, dynamic market insights and helping to secure the most favourable deal for both buyer and seller.
5. Miscellaneous costs
While not applicable to all property sales, Capital Gains Tax (CGT) is certainly one that needs to be planned for where it does apply. CGT is the tax payable on the disposal of an asset (your property) where the proceeds exceed the base cost. CGT is the responsibility of the seller and forms part of income tax payable to SARS.
Moving costs should also be taken into consideration as it can be a significant one. This would include the fees of a professional movers company or the transport cost of doing it yourself. Depending on the nature and distance of the move it may also be useful to get insurance for the items being moved.