The costs of selling property in South Africa can be significant. Try and estimate these expenses before making the final decision to sell your property. This is to enable you to determine your proceeds after registration of the transfer.
These are the major costs of selling property:
The estate agent’s commission for selling the property. The fee is usually 5 – 8% of the selling price of the property, plus VAT of 14%. If you are selling your property privately then there would be no estate agent’s commission payable, but you’ll have upfront marketing costs.
Costs for electrical-, beetle- (if you have a coastal property), electric fencing- (if applicable), gas- (if applicable) and plumbing (if in Cape Town) compliance certificates. These certificates can amount to an estimated cost of R300 – R750 (gas is less expensive), but if problems are discovered then you also have to pay for the necessary work to be done before the certificate can be issued.
Any bond cancellation fees, if applicable. This is charged by the attorneys if you cancel your bond after selling your property. It is usually between R2000 – R3500. The Bank holding the bond will appoint this attorney.
Early bond cancellation (penalty) fees. If it is your intention to sell your property and cancelling your bond, you shouldinform your bank in advance, in writing (and continue notifying the bank every 3 months until your property is sold). Otherwise the bank may decide to charge you an early termination fee for cancelling your bond. This fee is calculated as 3 months’ interest, which can be a substantial sum to pay unnecessarily. Please note that if you give notice of your intention to cancel your bond, the bank will put a hold on your current facility and you won’t be able to access it.
Upfront contribution towards municipal rates and taxes, services and levies (if applicable), usually equivalent to about 4 months’ payments, to obtain the necessary rates and taxes and levy clearance certificates. This can be a large amount.
Upfront contribution towards Home Owners Association and/or Body Corporate levies (if applicable), usually equivalent to about 3 months’ payments, to obtain the levy clearance certificates. If your property transfers earlier than anticipated you shoud receive a pro rata refund.
Costs of moving your furniture and possessions to a new property or to storage.
Some of these costs of selling property are only payable when the property is transferred into the new buyer’s name while others (like the upfront clearance certificates) are always payable prior to transfer.