The public may find this difficult to believe but fairly frequently conveyancing attorneys handling the purchase and transfer of residential property find themselves having to deal with home buyers who have gone a long way down the line to completing their purchase – they may even have put in an offer which has been accepted – without realizing just how much the ‘extras’ (over and above the purchase price), usually required in upfront payments, such a purchase involves.
This was said recently by Saneli Ngcobo, an attorney with the Cape legal firm Gunston Attorneys.
“A reputable estate agent will explain all the necessary details to a buyer,” said Ngcobo, “but not doing so can even lead to the sale eventually being cancelled despite all the work that has already been put into the transaction.”
Although there are circumstances where some banks will factor transfer and other costs into their bonds, it is more common that these will be required to be paid from the purchaser’s own funds. As an example, on a R950,000 home, the transfer costs, including transfer duty as well as the various attorney costs and VAT could amount to about R28,000, and the bond registration process carries separate costs of about R16,000. Many (especially first time) buyers may not know that the transfer and bond registration are separate process – and will need to have made careful advance provision for these sums.”
“Speaking generally”, said Ngcobo, “a buyer will do well to get advice early on, factoring all of these things into account, which might help them decide not only the area and level at which they can afford to buy, but also when they can responsibly afford to do so.”