The costs of buying and selling a new home

2012-09-08 10:11

When you buy and sell property, there are transactional costs. For example, if you sold a R1-million home and bought for R1.5 million, your transaction costs would be at least R142 000.

If you sold a R2-million home and bought for R3 million, your fees would be R344 500.

Selling
Agent fees: you will pay estate agent fees of between 5% and 7%, excluding VAT

» 5% plus VAT on a property of R1 million will set you back R57 000
» 5% plus VAT on a property of R2 million will set you back R114 000
» Electrical certificate – the new rules governing electrical certificates are onerous and few houses meet the standard. The cost will depend on the current state of electrics on your property, as well as the size of your home. It can cost anywhere from R10 000 to R50 000. For a smaller R1-million property, budget for R10 000; for a larger property, budget R20 000.


Buying
When you buy a home, apart from the price of the property, you also need to factor in transfer fees and bond registration fees.


In addition, you need to put down a deposit for your water and electricity with the council.

According to ooba’s bond transfer cost calculator (www.ooba.co.za) the total transaction fees to purchase a property of R1.5 million would be R75 000.

The costs escalate more aggressively as the house price increases and you would pay R210 500 in total for a R3-million home.


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