Selling a property? The costs involved.
Selling a property? Here is an idea of what it may cost you!
When you receive an offer to purchase for your property, you need to know what the costs involved are before you commit! Because if you subsequently discover that there is a shortfall that you can’t pay, you will be in breach of the contract and the purchaser will have the right to claim damages and more.
Here is a breakdown:
- A bond cancellation fee is always applicable – even if your bond has a zero balance. The fee is usually between R3,000 – R5,000 but may be more
- Penalty interested – there is a 90-notice period appliable on most bonds and the penalty interested can be charged. PLEASE NOTE this varies from bank to bank and in some cases the penalty interest can be waived by the bank, under certain circumstances
- Some banks will accept notice from the bond holder where others will only accept notice from the appointed bond cancellation attorneys who have to work through an attorney who is on the bank’s panel.
- Should your property transfer before the notice period is over penalty interest will be payable on a pro rata basis. But before you request that the transfer to be delayed, calculate the amount of money you would save in relation to that amount of penalty interest you will be liable for, e monthly bond instalment, insurance on the property, rates, levies etc.
The best approach is to consult your bank and confirm what the costs and charges will be to cancel your bond.
Missing Title Deeds:
The Deeds Office will not process a transfer without the original title deeds. Should your original title deeds be missing, the conveyancer will have to apply for a certified copy from the deeds office.This application will carry a cost of anything from R2,500 up to R4,000 (please note this is an estimate and may cost more). The process is also timely and could take a couple of weeks.
If your property is bonded, the bank should be holding the originals, but believe it or not the banks sometimes misplace the originals. However, if it can be proved that the bank lost the title deeds, they will be liable for the associated costs.
If you purchased the property cash or have paid and cancelled your bond, make sure you have the original title deeds!
Rates Clearance Certificate
All properties must have a valid rates clearance certificate which has been issued by the local municipality in which the property falls.You will be liable for any outstanding rates and taxes, and the conveyancer may charge you a prorate amount for rates and taxes that are charged in advance by the municipality, in anticipation of the time lapse between the issuing of the rates clearance certificate and the actual transfer of ownership.Many conveyancers appoint a third party to assist in obtain the clearance figures and certificate, as it is very difficult to obtain these figures from some municipalities and often requires multiple, face to face meetings. You may also be charged for this service. (Please ask your agent for an approximate cost as this varies dependent on location)
Spluma (Spatial Planning and Land Use Management) certificate – Applicable in Mpumalanga Deeds OFFICE
The Seller is also liable for all the costs involved in obtain the Spluma (Spatial Planning and Land Use Management) certificate. As with rates clearance, it is best to appoint a correspondent. Please note all documentation must be provided by the seller – including but not limited to building plans approved by the municipality! Should you not have approved building plans of the building as it stands, you will need to have plans redrawn, submitted and approved. (You will be liable for this cost)
You will be liable for the payment of the agent’s commission, which is paid by the conveyancer from the proceeds of the sale. Please check that mandate you signed with your agent as many sellers do not realise that VAT is usually applicable and charged on top of the % amount.
Electrical Compliance Certificate/s and Gas
You must also provide the Purchaser with a valid Certificate of Compliance in respect of all and any electrical installations and gas installations (including but not limited to an electric fence) on the Property. If any repairs are required to be made to the electrical installations and or gas installations or any part thereof, you will be liable for all the associated costs. PLEASE NOTE, we recommend that you only start this process once ALL the purchaser’s finances are in place.
If you have any questions, please feel free to contact us on email@example.com and one of our agents will get back to you!
Best of luck!