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. 

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. 

1. 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. 

2. 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 

"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. 

3. 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.

4. 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 and worth noting that this commission is a success-based fee whereby the agent is only compensated once the transaction is successfully concluded. 

5. 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. 

A platform like Wise Move offers users an easy way to book professional movers anywhere in the country in the most efficient and cost-effective way. 

"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.

* Please note that costs mentioned here are estimates - property sellers are advised to check costs with relevant bodies and organisations.