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Understanding the cost of selling your property
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.
·
Compliance
Certificates
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