More than 4 years to cover the cost of buying and selling your R1m home
Be prepared to stay in your home for at least four and a half years to recoup your transfer costs and agents commission of, on average, 7.5%, as an average homeowner of a R1m home.
With house prices growth currently running at only 2.8% p.a. according to FNB, it will take an average homeowner of a R1m home 4 years 7 months to simply recover their initial home ownership costs of transfer fees and the average 7.5% estate agents commission typically charged when they sell their home.
Using a low commission estate agency like HomeBid at 1.95% plus vat it will take only 2 years 5 months to recover the total initial transfer costs and low commission through 2.8% p.a. capital appreciation of their home.
What this means to the average home buyer is that the choice of using a traditional estate agency to sell their home forces them to stay in their home for more than two years longer simply to pay the excessive commission when selling their home.
“We often have sellers looking to upgrade and when we explain the extra two years of having to stay in their existing home so that the 2.8%p.a. capital appreciation can offset the 7.5% (plus VAT) commission when using a traditional estate agency, they cry foul,” says Cavan Sheahan, general manager of low commission estate agency, HomeBid.
For home owners in the R3m+ market place where transfer fees are much higher, using the traditional estate agency at 7.5% plus vat commission, it will take them 6 years 5 months to recover the initial costs of transfer fees and agents high commission with current capital appreciation of only 2.8% p.a. And the higher the value of the home, the longer the homeowner will need to stay in the property before the cost of transfer fees and eventual sale is covered.
With HomeBid at 1.95% plus vat this time period for a R3m home is only 3 years and 5 months enabling the R3m homeowner to save with three years more of capital appreciation.
“We continue to impress our clients with our unique offering of small commission and big support as evidenced by the references on the HomeBid website,” says Sheahan
This feature was sponsored by HomeBid – the largest low commission estate agency in South Africa, currently selling over 50 homes a month, at a minimum commission of R17,500 plus Vat.
Find out more about career prospects at HomeBid here.