Selling a property? Consider these costs

It's well known that there is no such thing as a free lunch and similarly there is no such thing as selling a residential property without incurring some costs.

"It is easy to overlook the fact that there are costs associated with the sale of the property - you're selling and not buying, but knowing what you're in for allows for better planning and management," says Skoko Sebola, Principal at Leapfrog Midrand. 

READ: Exploring property transactions: an A-Z guide

Bond cancellation 

If there is a bond on the property, the bond must be cancelled at the bank and this cancellation will incur a fee. Sebola says there are no important points to note here:

Notify the bank at least 90 days in advance of cancellation 

The cancellation will incur a fee - budget for upwards of R6000 (it can be more, or less)

The fee is not paid to the bank but to the attorney appointed by the bank to manage the cancellation, and thus the fee compromises the remuneration for the attorney and the fee payable to the Deeds Office for cancelling the bond. 

Compliance certificates 

It is the seller's legal obligation to produce compliance certificates before the property transfer can take place. 

Compliance certificates are for the seller's account and a compulsory part the transaction:

• Electrical certificate of compliance
• Solar compliance certificate 
• Electric fence certificate
• Water installation certificate 
• Gas certificate of compliance 
• Beetle-free certificate 

READ: 4 factors to consider when selling a property

"Play it on the safe side and budget at least R3000 per certificate. Further costs may be incurred to rectify issues identified in the compliance process," Sebola explains. 

Rates, taxes and levies

The onus is on the seller to ensure all rates, taxes and levies on the property are fully paid up before the transfer can take place. 

Sellers may also be required to make future-dated payments, based on an approximate amount, for between two and six months.

Agent commission 

The property agent's commission is paid by the seller and is the remuneration for a professional service. 

"A registered property professional will be very transparent - and upfront - about the commission structure and sellers should feel free to ask any questions in this regard," Sebola says. 

The commission is calculated as a percentage of the purchase price of the property. 

Moving costs 

The physical costs of moving your possessions should definitely be considered as it can be significant, depending on the geographical distance of the move and the bulk and volume of the move. 

"I always advise buyers and sellers to not overlook this important part of the process because there is, arguably, few things as stressful as getting to moving day without a detailed plan of how you're physically going to do it," Sebola adds. 

Not all costs will apply to all sellers so it is advisable to work with a property professional to determine the ones that apply to a specific property transaction.

READ: 7 Upgrades that will improve your home's kerb appeal dramatically

According to Arnold Maritz, Co-Principal of Lew Geffen Sotheby's international Realty, who earlier this month shared 10 proactive steps you can take as a home seller and explained there are essentially two primary types of delays when selling a home; the first relating to the confirmation of the sale and those that occur once the sale has been confirmed and hold up the transfer.

Here is a look at what Maritz had to share: 

"Once the potential minefield of multiple complex steps, reams of documentation along with suspensive conditions and contractual obligations has been successfully navigated and the deal is finally done, many people breathe a sigh of relief.

"But the deal isn't quite done yet and the expected downhill cruise to transfer can still become an uphill battle if one isn't careful."

He says that many of these delays can quite easily be avoided or resolved through good communication and prompt co-operation with the transferring attorney and agent but if sellers have addressed the following points, they can offset many problems before they occur:

1. Have Approved House Plans Ready:

If you've made structural changes to your home, such as adding a room or renovating the kitchen, ensure that you have all the necessary permits and approved house plans ready for potential buyers.

Buyers often want to see these documents to verify that the work was done correctly and legally and getting plans approved with the Council can take many months which is probably a lot longer than most buyers would be willing to wait.

2. Get Your Certificates of Compliance Done:

If you are even thinking about selling your home at some point in the near future, it's a good idea to get a head start on your compliance certificates.

Property owners are required by law to ensure that the property is legally fit for sale and before the transfer can take place, the transfer attorney must be in possession of the relevant COCs and, although the process is quick and simple, if there are any major issues to be addressed, it could delay or even scupper the sale.

3. Complete Repairs and Inspections in Advance:

Before listing your home, conduct a thorough inspection to identify any necessary repairs or maintenance tasks and address these issues in advance to prevent them from becoming deal-breakers during negotiations.

4. Organise Financial Documentation:

Gather all essential financial documents ahead of time and if there are outstanding liens or debts on the property, work to resolve them before listing. Having your financial affairs in order can expedite the closing process.

5. Price Your Home Realistically:

Overpricing your home can lead to extended time on the market, resulting in frustration and potential financial losses.

Work with an experienced real estate agent to determine an accurate and competitive listing price based on market conditions, recent sales in your area, and the unique features of your home. A well-priced home is more likely to attract serious buyers quickly.

6. Declutter and Stage Your Home:

A cluttered or poorly presented home can deter potential buyers and prolong the selling process. Invest time in decluttering, depersonalizing, and staging your home to make it more appealing to a wide range of buyers. A well-presented home not only sells faster but may also command a higher price.

7. Be Flexible with Showings and Negotiations:

Being inflexible with showing schedules or negotiations can discourage potential buyers and lead to delays. Be open to accommodating reasonable showing requests and be willing to negotiate in good faith. A flexible approach can help maintain the momentum of the sale.

8. Secure a Qualified Real Estate Agent:

Selecting the right real estate agent is crucial in avoiding delays and frustrations. Choose an experienced agent with a strong track record and local market knowledge as they will guide you through the process, manage expectations, and proactively address any issues that arise.

READ: The role of a real estate agent : What you need to know

9. Anticipate Buyer Contingencies:

Buyers often include contingencies in their offers, such as home inspections, appraisals, or financing approval. Be prepared for these contingencies and ensure that your home is in good condition to pass inspections and appraisals. Clear any potential roadblocks to financing approval, such as unresolved liens or disputes.

10. Be Ready to Negotiate Repairs:

After the home inspection, buyers may request repairs or concessions. Be open to negotiating these requests to keep the deal on track. Addressing concerns promptly and reasonably can prevent delays caused by disagreements.

"A well-prepared and organised approach to selling your home is essential for avoiding frustrating and costly delays and by taking these proactive steps, you can increase the likelihood of a smooth and timely sale," says Maritz.

https://www.property24.com/articles/selling-a-property-consider-these-costs/32635

To this end he explains that there are four main costs sellers should prepare for, including bond cancellation, compliance certificates, taxes and agent costs. Sebola shares more on what each of these expenses entail.