Who, what, when and how much?
It is important to anticipate the costs you will be liable for when selling your property. Any delay in payment of any fees, associated costs and/or documentation, can encumber the transfer process and find you in breach of your “Sale Agreement”.
In this article we highlight what sellers and purchasers should provide for in their cash flow to conclude the exchange of the property from the seller to the buyer and the fees typically charged by:
- South African Revenue Services (SARS)
- Estate agents
- Conveyancing attorneys
- Licensed electricians, gas, pest and water specialists
The seller is responsible for the following costs:
Electrical Compliance Certificate
When selling your home, it is a legal requirement for homeowners to possess a valid Electrical Compliance Certificate (ECC). Transfer of ownership cannot take place without this. It will cost around R 1 000.00 to R 2 000.00 to secure a certificate from a licensed electrician, which excludes any electrical repairs required to fulfil compliance requisites.
Gas, Plumbing, Electric Fence Certificates
Gas Certificate of Conformity, Plumbing and Entomologist Clearance Certificates and Electric Fence System Certificates of Compliance may also be required depending on your property, your buyer’s requirements in the offer to purchase and/or your municipality. These certificates are valid for various periods and worth securing prior to putting your house on the market. Your agent will advise you and can recommend trusted service providers.
Municipal Rates and Taxes
These are payable prior to your conveyancing attorney lodging any transfer documents. Allow 2 – 4 weeks, and expect to pay anything owing plus 4 months in advance, calculated according to your average account over a recent period. At this point the seller should stop paying municipal accounts. Your conveyancing attorney is required to make this payment on your behalf as municipalities will only accept payments from a Trust Account.
3 – 6 months after the sale is concluded you can apply to your municipality for a refund based on the final reconciliation between the seller’s and the purchaser’s liabilities. This is not an automatic procedure and you must apply for a refund.
NB: Take your electrical and water meter readings on the day you depart your property.
Although the purchaser is responsible for most of the conveyancing attorney’s fees, the seller will be required to pay the conveyancing attorney’s appointment by the bondholder for their services to cancel the existing bond.
Agent’s Fee or Commission
This is ordinarily agreed in advance, or negotiated on the acceptance of the offer to purchase, and confirmed as binding when the seller accepts the offer to purchase. Your conveyancing attorney will make this payment to your estate agent, upon final registration with the Deeds Office.
The Purchaser is responsible for the following:
Conveyancing Service Fees
Although the conveyancing attorney is appointed by the seller, the purchaser is responsible for the fees. Conveyancing fees are based on a sliding-scale based on the purchase price.
These will include:
- FICA identification and verification.
- Transfer fees
- Transfer duty
- Deeds office Fees
- Deeds office Search
- Rates application Fees
- Homeowners Clearance Certificate (as may be required)
- Postage, petties and travel
New Bond Registration Costs
- The bank granting the mortgage bond will appoint a conveyancing attorney to attend to the registration of the purchaser’s mortgage bond. This cost is also calculated on a sliding-scale and is based on the value of the bond to be registered.
- Given the uncertainty of timing to conclude your property transaction and the final receipt of monies, you must make cash flow provisions to fund compliance and suspensive condition requisites to minimise delays. Some institutions may grant bridging finance to give you the cash flow necessary to fulfil these needs. This will largely be contingent on the signed and accepted ”Offer to Purchase” and your buyer’s success in securing the purchase price.
Leadhome can assist you
Leadhome can assist you well in advance, with estimate costs based on your desired property value including:
- Compliance Certificates
- Transfer Duty
- Transfer and Conveyancing Fees
- Municipal Clearance Fees
- And more…
We will also recommend the best Conveyancing Attorneys in your area.