The Hidden Cost of Selling Your Home
Since the goal is to make money on a home sale, it’s easy to forget that selling your home costs money as well. Some of the fees and expenses that contribute to that cost can be surprising, particularly for first-time home sellers.
For starters, let us look at some of the obvious costs and then look at the hidden costs.
The selling costs you (probably) can't avoid
The agent's commission
If you are using a real estate agent, you can expect to pay around 6% commission. This is taken out of the sale price. So, for example, if you sell your home for R2,000,000, you can expect to pay up to R120,000 in commission
Nothing is preventing you from selling your home on your own, however, it’s time consuming and far from straightforward. Not only do you need a lot of time on your hands to get your house ready, to conduct show houses, to talk to buyers, and to sort all the legal requirements – but you’ll need to negotiate and close a major sale, too. It might also give you a new appreciation for real estate agents.
Compliance certificates, such as gas, plumbing, beetle and electrical, must all be in order before transferring of ownership can take place. You can budget between R750 – R1,000 per compliance certificate, excluding any potential repairs that would need to be fixed before the certificates are issued.
If you have a bond registered over the property, the bond has to cancelled on transfer and you are responsible for payment of the conveyancer (lawyer) fees for cancelling the bond.
Rates and Taxes
The conveyancing attorney will also require a clearance certificate from the municipality to ensure that your rates and taxes are paid up to date. In some cases, rates and taxes are payable between 2 – 6 months in advance. It differs from one municipality to another and depending on what your property is worth, but as a ball-park figure, you can budget and amount of R5 000 per property.
The extra, hidden costs
But all those costs are just the beginning. Here are more costs to factor in. Most of these are optional to some degree, but they do make the selling process easier.
Bond Cancelation Costs
Remember that if you’re selling your home and want to cancel your bond, you have to give your bank 90 days’ notice. If you don’t give notice your bank will charge you a penalty fee for early termination of your bond.
However, if you want to cancel your bond within the first two years of the loan agreement, you will also be liable for penalty interest of approximately 1% of the amount you owe.
When buying property, the government hits you with a tax called stamp duty. This won’t affect you as a seller, but you will need to pay it if you’re buying another property. Stamp duty can cost hundreds of thousands of rands, so be sure to factor it in.
Those beautiful, stylised and probably photoshopped images on property websites aren’t free. While optional, getting good quality photographs to show off your property in the best light will help it stand out. “Home staging” or styling is becoming increasingly popular and involves giving your whole place a temporary makeover for the camera – but it will cost you.
Repairs and Cleaning
This is another cost. Before moving house, you really need to get your property in clean working order and in excellent condition. This should add value to your home or at least help you sell it at a fair price.
People often forget to factor this in, but a moving company can charge you R15,000+ if you have a large house and lots of stuff. However, if you buy or sell a home through Freek Properties you can use our moving van for FREE.*