- The transfer of property process incurs additional fees, including the bond cancellation fee, for which the seller is responsible.
- The seller must also obtain a number of compliance certificates, granted by professional home inspectors.
- Finally, the seller will need to cover necessary rates and levies for up to six months.
Purchasing a property involves a number of additional costs, aside from the payment of the home loan and accompanying interest rates. Whether you’re a buyer or a seller, you need to be aware of these costs, and which party is responsible for paying them.
Bond transfer and registration: The main costs to be aware of
The bond registration and transfer of property process brings with it a number of fees.
- Bond cancellation: The seller cancels his or her bond on the property. A bond cancellation attorney will be chosen by the bank to perform this task, and will be owed a cancellation fee. The bank must be granted 90 days notice before a bond is cancelled.
- Transfer of property: The ownership of the property is transferred from the seller to the buyer. A conveyancing attorney, appointed by the home seller, carries out this process; and will charge a transfer fee.
- Transfer duty: A tax on the transfer of the property, though only payable on properties valued above R1 000 000.
- Bond registration: The bond is registered in the buyer’s name, and the bond attorney, appointed by the bank, charges a bond registration fee for doing so.
Out of all these fees, the only one that is payable by the seller is the bond cancellation fee. The other costs are all covered by the buyer.
If you’re a home buyer and want to find out how much this process will cost you, you can use our Transfer Cost Calculator.
Other costs payable by the home seller
Aside from bond cancellation, here are some of the other processes that the seller needs to concern themselves with.
There are a number of certificates the seller needs to obtain to show that the property is in working order. The five required compliance certificates are:
- Electrical Certificate of Compliance (ECOC), which must be no older than two years.
- Water installation certificate. No set period of validity.
- Gas certificate. No set period of validity.
- Beetle certificate, to ensure there are no beetles eating through the wood. No set period of validity.
- Electrical fence certificate, if applicable, that ensures the electrical fence is safe and properly installed. No set period of validity.
In order to obtain these certificates, the seller will need to have licensed property inspectors carry out an evaluation of the home. They will grant the necessary certificates, which will come to an estimated R2 500 in total.
Rates and taxes clearance certificate
This can be granted by the local municipality, who will require payment upfront from the home seller. All outstanding rates and taxes will need to be paid, as well as up to six months worth of rates and taxes in advance.
Levies clearance certificate
If the property is sectional title; the body corporate, like the local municipality, may require that the home seller pay a few months worth of levies in advance.
Estate agent commission
Of course, if an estate agent was employed, then the seller must factor their commission into the cost of selling a home. Some sellers may be tempted to skip this payment by selling the home privately, but hiring an estate agent will actually save you time and money in the long run.
So what about the home buyer?
As mentioned, the home buyer need concern themselves primarily with the transfer and bond registration costs, as well as the cost of insurance packages (the bank may require that the buyer purchase home insurance before they will approve the home loan application).
It’s useful to know the additional costs of buying a home so that you can budget appropriately. A home loan comparison service, such as ooba Hoime Loans, can help you free up funds by reducing the amount you will need to pay on your home loan.
We achieve this by submitting your home loan application to multiple banks, so you can compare deals and choose the one best suited to you.
We also offer a range of tools that can make the home buying process easier. Start with our Bond Calculator, then use our Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.
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