Take note of these hidden costs when selling your house
Category General News
Your home is one of your largest assets. Being prepared during the seller process can ensure you make the most of a sale. It can be a surprise to find many hidden costs arise when listing your property. Don't get caught off guard! Kellaprince Properties sets out the most common fees and expenses you can plan and budget for. In this way, you'll also be able to price your home properly for maximum profit.
Property practitioner commission
If you've hired a property practitioner to sell your property, you'll need to pay them for their services rendered. Each agency and brokerage has different rates but the standard fee is between 5-7% plus VAT. You can negotiate the percentage but keep in mind the travelling expenses, time taken for admin and paperwork, and marketing costs property practitioners pour into ensuring a successful sale.
Capital Gains Tax
When selling your house, you may be liable for paying income tax. This applies if it is your primary residence (the home you physically occupy) where the gain/loss exceeds R2 million. If you sell a second or third property (one in which you don't live), you will be liable to declare any capital gain to SARS and pay the tax on that gain.
Clearance certificates
As part of the selling process, you'll need these certificates to confirm your home meets certain standards or requirements:
- Electrical: The Electrical Certificate of Compliance ensures that the electrical work done on your property meets the regulations set out by South African National Standards.
- Electric fence: If you've installed this as a security measure, you will need an Electrical Fence System Compliance Certificate.
- Water installation: This certificate affirms your property's water system is in good working order.
- Plumbing: This certificate affirms your property's plumbing work complies with all the regulatory installation requirements.
- Gas installation: If you use gas appliances, this confirms your gas systems are in working order.
- Rates and taxes: You'll need these certificates from the municipality stating that your rates and taxes are paid up to date. The municipality can ask for between two and six months of payments in advance but you will be refunded if the property transfer registers within a shorter timeframe.
- Levies: If your property is part of an estate or sectional title scheme, you'll need to ensure all levy payments are up to date to receive this clearance certificate. You may also have to pay a few months in advance to cover costs until the transfer takes place. Also, you will be liable for any special levies required until you are no longer the registered owner of the property.
- Beetle: Only compulsory in areas that suffer from these insects, this certificate confirms your property is free of wood borer beetles that can damage the structure.
Inspection and repairs
Although not compulsory, another potentially hidden cost is a home inspection. This can help you pinpoint any hidden defects before you sell. Having this done and making repairs will also give you more negotiating power since your home will be in tip-top shape. You should budget for changes from the inspection as required by your buyer. You may also choose to make adjustments to your home to prepare it for the market such as staging.
Title deed
You will be liable for costs if your title deed is lost or has errors that need to be corrected by a conveyancing attorney.
Bond cancellation
If you have a bond on your property, you'll have to pay a cancellation fee to close it. Financial institutions have different rules and charges. However, you'll likely pay upwards of R4 000 per bond and need to provide a 60 or 90-day written notice to avoid any penalties. It's advisable to send a letter before you list your property for sale so you can prevent this additional cost.
Tenant deposit
If you are renting your property to a tenant, you will need to pay them their deposit back including any interest accrued during their tenancy. You may also need to budget for any repairs required after they vacate the property.
Moving costs
While not a part of the seller process, it is still a cost you should factor in once your house closes. This can include moving furniture from your current property to the next, storage costs, and deposits on municipal services or a rental. Thinking ahead with costs will ensure you have a smooth transition once your sale concludes.
Navigate the seller process without fear
While some of these hidden costs are unavoidable, you can still plan ahead and budget accordingly. Having an experienced property practitioner by your side is indispensable in recognising and managing these expenses. Trust Kellaprince Properties' expert seller agents to help you get through this process with a smile on your face. List your property for sale today and we'll get back to you ASAP.
Author: Kellaprince Properties