The costs of selling a house quickly add up, therefore it is vital to know the costs involved in selling your property to determine the exact profit that you will make.
The costs that you should be aware of include advertising, obtaining a rates and taxes clearance certificate, bond cancellation fees, obtaining compliance certificates, estates agents commission, and capital gains tax.
Home inspection
Other sellers may require a home inspection to identify any issues before placing their home on the market. Costs range from R4 000 to R8 000. The prices of home inspections differ and will depend on the service provider.
Advertising Costs
A Fitzanne Estates property agent explained that if you are dealing with a property agent, advertising costs are usually included, however, if you are advertising the property on your own capacity you would have to pay for the advertising costs.
Agents Commission
The property agent also noted that if you are dealing with an estate agent, the standard figure of commission 7.5% excluding VAT should be paid, however, this is not a set figure. The commission rate can be negotiated before signing the contract. If you want to avoid the commission costs you can sell your property privately, but if you are not experienced this can be a mammoth task.
Bond Cancellation
Bond cancellation fees are charged when you cancel your bond after selling your property. If you cancel within 2 years of taking out a bond there can also be an early settlement fee that will be required.
Rates and tax certificate clearance
The rates and tax clearance can be obtained from a body corporate or the local authority stating that your rates, taxes, and levies are paid up to date. To get the clearance certificate it is essential to ensure that the rates and taxes have been paid 4 – 5 months in advance before registration. This required payment can add up to a fair amount of money that has to be paid upfront.
Levies
Where the seller is in an estate or sectional title property, the process that determines the levies that should be paid is similar to the rates and tax certificate. The homeowners’ association or body corporate may request that the seller pays for their levies a few months in advance to ensure these costs are covered until transfer takes place.
Electrical Compliance Certificate
Obtaining a home’s electrical certificate of compliance is another cost which sellers must be aware of. The electrical compliance certificate is required by law for the property to be transferred to the buyer’s name.
According to the South Africa’s current legislation, an ECOC (electrical certificate of compliance) is only valid for two years. This means if the ECOC is older than two years, the seller will be required to get a new one.
Electrical Fence System Compliance Certificates
According to the Fitzanne Estates property agent, an Electrical Fence System Compliance Certificate is also a requirement if the homeowner has installed electric fencing as a security measure on his/her property. “It is vital to note that an ECOC and Electrical Fence System Compliance Certificate are two separate documents,” he emphasized.
Certificate of Conformity
It is mandatory for homeowners who have installed gas lines to have a certificate of conformity which indicates that the installation has been conducted by a qualified technician. Obtaining a certificate of conformity is therefore vital.
Beetle Infestation Clearance Certificate
Homeowners selling property in the KwaZulu-Natal and Western Cape regions will need to provide the purchaser with a beetle-free certificate. According to the Fitzanne Estates property agent, the beetle certificate is required only in respect of two types of beetles. “While the certificate may not be compulsory, in certain instances a beetle free certificate will be required before the bank will grant finance to the buyer,” the agent noted.
The Fitzanne Estates agent concluded by stating, “Knowing what costs are involved in a property transaction is essential and will give you the seller an accurate amount when it comes to the profit earned once the sale has been finalized. Working with experienced property agents is advised to ensure the best outcome when selling your property.
