After searching various property sites while trying desperately to ensure that you stay within your budget you finally find it: a humble abode that meets your needs. You make an appointment to view it and it is everything you imagined and more. Before you sign on the dotted line it is important to know the main costs you can expect to pay before and after the transfer of the property.
Should a financial institution not grant you a 100% bond you will have to pay the balance of the purchase price from your own pocket. Putting down a deposit is a sign of good faith. It shows the seller that you are serious and the bank is more likely to grant you a bond for the balance of the purchase price.
- Transfer attorney fees and related costs
The seller or agent will usually appoint a conveyancer to attend to the transfer of the property. The conveyancer would be entitled to charge the purchaser transfer fees and costs at a sliding scale depending on the purchase price. Other than the conveyancer’s fees, as a purchaser you would be liable for transfer duty (if applicable), deeds office fees, postage and petties, printing, telephone and document generation charges incurred by the conveyancer.
- Bond registration attorney fees
If you are granted a bond you would also have to pay bond registration fees to the conveyancer appointed by the bank to register your bond. These too are charged on a sliding scale depending on the amount of the bond. Over and above these fees the purchaser would be liable for deeds office fees and other sundry expenses incurred by the conveyancer. There is also a once off initiation fee that may be charged by the bank. This fee must be paid before registration of the transfer of the property unless the bank agrees to capitalise it as part of the loan amount.
So, you have put pen to paper and after what seems to have been the longest weeks of your life the property is registered in your name. During your happily ever after, and over and above your monthly bond repayment (if applicable), you should expect to pay the following expenses:
- Rates and taxes or levies
Rates and taxes will be payable monthly to the municipality and levies to a body corporate depending on whether the property is a freehold or sectional title property.
- Homeowners insurance
This insurance covers the replacement value of your property should an insured event occur. You can also take out insurance to cover the contents of your property.
- Water and Electricity
The use of water and electricity on the property will now become your responsibility. Investing in green solutions and renewable energy may be worth considering.
Hiring the services of a gardener and domestic worker may be some of the other extra costs you will incur. Now and again your walls may need a fresh lick of paint and that hand-me-down couch may need to be replaced. Ultimately, keeping your property well maintained will ensure that when you are ready to move on, someone else will fall in love with your home in the same way you did.
Article by Kagiso Mahlangu
Partner, Harris Marcus Mahlangu Attorneys | Notaries | Conveyancers