PROPERTY SELLER COSTS
Seller costs are limited and clearly identifiable. Unless prior arrangements are made, the buyer pays all legal and conveyancing fees, transfer duties and other costs of transferring the property onto his name.
Once you’ve been given an estimate of market value by your agent, you can get a rough idea of how much cash you might walk away with when the sale is completed. This can be particularly useful when you start looking for another home to buy as well as in determining your required selling price or the minimum you are prepare to negotiate to.
To estimate your net proceeds, from the estimated sales amount, subtract the applicable costs in the two sections outlined below: Normal seller’s costs and Negotiated Seller’s costs.
NORMAL SELLERS COSTS
These costs are almost always for the sellers account but please bear in mind that negotiation can take place as part of the purchase process.
Property Rates & Taxes
In order to effect transfer, the seller must prepay the municipal rates in full until the end of the current financial year which is 30 June. Only then does the municipality issue the Rates Clearance Certificate.
Once transfer has has taken place, the conveyancing attorneys then refund the seller the portion paid, which is not for their account.
For a detailed schedule of municipal rates tariffs and other municipal documents go here
Bond Cancellation Fees
The banks will charge you a fee for settling your current bond, as well as a penalty charge for early cancellation. See details here
Agents Commission
Agents charge varying rates and you must ensure that the percentage is agreed upon prior to the agent beginning marketing. This is normally going to vary between 5 and 7 % plus VAT, although exceptions do occur where for instance, on vacant land up to 10% is charged.
A word of warning. Do not be tempted into appointing agent simply because they are willing to drop their commissions. If they are that quick to give away their own money they will be even quicker to give away yours. Good agents know what they are worth and are confident of their service levels and results provided.
Installation Compliance Certificates
The seller needs to supply an Electrical Compliance Certificate, as well as an Electrical Fencing Certificate and a Gas Installation Certificate if applicable. See full article here.
These will cost in the region of R300 each and must be issued by a certified and registered contractor.
Please remember that if there are faults, these will have to fixed before the certificate is issued.
Borer Beetle Certificate
These are generally common in Cape Town and KZN coastal areas but are not standard sale requirements in other areas of SA. The banks however might insist on a borer meetle sertificate for certain suburbs e.g. Central in Port Elizabeth or if the home has has a high ratio of timber in the tsructure such as with A Frame Homes.
See full article here. Costs of the inspection will be in the region of R500. If infestations are found, a fumigation for a standard home will cost around R5000.
Latent Defect Repairs
If there are latent defects in the property (see definition here), the seller is obliged to disclose this to any potential buyer and the buyer might then put in an offer subject to the propblem being corrected.
Sellers are advised to obtain quotes for any such major repairs prior to marketing as having this knowledge beforehand, assist when undertaking negotioations around price and conditions.
NEGOTIATED SELLER'S COSTS
As part of negotiations, the seller may agree to pay part of or in full, the following costs.
- Transfer Duties
- Survey fees
- Professional House Inspection
- Borer Beetle Certficates (If buyer requests one)
- Conveyancing Fees
- Negotiated Repairs
Back to the Finance Advice Centre for
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Remember to look through our Step by Step Buyer Guide and also visit our Blog for other helpful information
Go to the Buyer Section for all your buyer answers
Remember to look through our Step by Step Buyer Guide and also visit our Blog for other helpful information
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