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Monday Feb 12, 2018

The costs of selling a property

There are many costs associated with the sale of a home that sellers often don't think about, thus decreasing the amount they anticipate they will get from the sale.

Estate agent's commission and the outstanding bond are two costs, but Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa, says others must be factored in. These include administration fees, clearance and compliance certificates and sectional levies.

"Sellers don't realise they will pay an administration fee to cancel their existing bond account. Regardless of the outstanding amount, a cancellation attorney will be used to cancel the bond account," Goslett says.

Generally, bond cancellation fees are R3 000 to R4 000.

A rates and taxes clearance certificate from the local council is also needed and will require three to six months of payment upfront to obtain. If the home is registered within a shorter timeframe, the council will refund the additional money which the seller has paid, Goslett says, but this could up to a year.

"If the seller lives in a housing estate or sectional title development, it is possible the homeowner's association or body corporate will ask them to pay their levies in advance to ensure these costs are covered until transfer takes place."

Legislation stipulates that every homeowner must be in possession of a valid Electrical Certificate of Compliance when selling their home. A compliance certificate is only valid for two years, so if the seller's certificate is older than this, or any electrical alterations have been done during the two-year period, the seller will be required to obtain a new certificate from a certified electrician.

If no faults are found, the certificate will cost between R500 and R1 000, depending on the size of the property and the call-out fee. If the electrician finds faults, then they will have to be fixed and the cost will escalate depending on the work to be done to make the home compliant.

The homeowner will also need to get an Electrical Fence System Compliance Certificate over and above the electricity compliance certificate if they have electric fencing around the perimeter of their property, Goslett says.

"The Electrical Machinery Regulations of 2011, issued under the Occupational Health and Safety Act 85 of 1993, places an obligation on the user of an electric fence system to have a system certificate of compliance.

"This requirement does not apply if the system was installed before October 1 2012. The electric fence system must be certified by an approved installer, and the certification is valid for two years."

Properties with gas lines will also need a certificate of conformity which indicates the installation has been done by a qualified technician.

A Gas Certificate of Conformity, valid for five years, is to be issued when there is a change of ownership.

While not compulsory, it has become standard practice for homeowners in the Western Cape and KwaZulu-Natal to provide the buyer with a beetle clearance certificate which is valid for three to six months.

In many coastal areas a beetle clearance certificate has become a written condition in the sales agreement.

"Usually, the beetle certificate is required only in respect of two types of borer beetles in imported timber. Banks and insurance companies will often request a certificate on transfer if the home is situated in an area known to be infested."

A home inspection is not a requirement, but is helpful for sellers to know what defects need to be repaired.

A home inspection could cost around R3 500.

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