Selling a property can be a daunting undertaking for a property owner – especially if it is your home and largest asset. As a seller you want to make sure you make the most you can out of the sale, cover what remains on your existing bond and any other expenses and ideally realise a profit.
Being aware of the costs for which you as the seller are responsible will enable informed decisions throughout the process of selling your property. Greg Brown, Director of Data Services at LexisNexis says that understanding what expenses are for the seller’s account can assist sellers to price their house well – making it more saleable – while ensuring the best outcome financially.
Let’s review what sellers should expect to pay for:
Estate agent’s commission
As the seller you are responsible for the payment of the estate agent (or agents’) commission. Some estate agencies will agree to negotiate their rate of remuneration, but the standard fee is between 5 – 7% plus VAT. Disruptors to the market are now offering various other options such as fixed rate commission structures – regardless of the selling price – or reduced rates if you allow them to be the sole marketers of your property.
“It is worthwhile investigating and negotiating where possible, while ensuring you receive the best possible service to facilitate a speedy sale,” says Brown. This amount will be paid by the transferring attorneys on transfer of ownership of the property.
As the seller you are responsible for arranging and paying for various inspections including electrical, beetle, electric fencing, gas and plumbing. These inspections vary region to region, so check with your estate agent or transferring attorney to establish which ones are necessary. These inspections are usually only requested once the offer to purchase has been signed and the buyer’s bond has been approved.
Should the inspections reveal issues that need remedy prior to compliance certificates being issued, you, the seller will be liable for these expenses. Many contractors offer the option to pay for these expenses once transfer has taken place – with the transferring attorneys handling payment from the sale revenue.
Rates and taxes clearance certificate
As the seller you will be required to pay rates and taxes upfront, for a period as prescribed by the municipality, for a clearance certificate to be issued. This can vary from two to six months. This certificate will be required by the conveyancers and if the property transfer is registered within a shorter time frame, the seller will be able to apply for a refund from the municipality for the difference.
Bond cancellation fees
Most banks required a notice period for cancellation of a bond. It is best to contact your bank and ascertain what their prescribed time frame is – and what the costs of cancelling your existing bond will be. If you are registering a new bond with the same bank, try to negotiate the reduction or waiver of the cancellation fees or penalty interest for the existing bond.
Levies clearance certificate
Sectional title complexes or estates require that levies be up to date before issuing a levies clearance certificate. They may also require advance payment to ensure that costs will be covered until the transfer of ownership has been registered.
“Working with a reputable estate agent takes a lot of the stress out of selling your property, but the onus is on you – the homeowner to check that your property is priced right,” says Brown.
“Using Lexis®PropIQ to obtain a comprehensive property valuation report helps determine the price at which to market your property and the comparative values of similar properties that have been sold for in the area.”
For more information, visit: https://www.lexisnexis.co.za/lexispropiq