8 oft forgotten costs you need to remember before listing your home
When first thinking of selling a home, most potential sellers will take the outstanding bond and the possible agent’s commission into consideration when working out if selling makes financial sense. But, if you are doing this you could be grossly over-estimating what you stand to gain from selling.
“Many sellers often forget to factor in other costs such as administration fees and clearance certificates when trying to determine what they will get out of the sale of their property,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, mentioning at least 8 other expenses during the home sales process for which sellers may be responsible.
What you may not realise is that you will have to pay an administration fee to cancel your existing bond account. Regardless of the outstanding amount on the bond account, a cancellation attorney will be used to cancel the bond.
This could cost anything between R3,000 and R4,000.
Rates and taxes clearance certificate
The attorneys will require a rates and taxes clearance certificate from the local council, which will mean that you will be required to pay money upfront to get the certificate. The council will ask for between three and six months payments in advance in order to provide you with a clearance certificate. If the home is registered within a shorter time frame, the council will refund the additional money. This does take some time; it is possible for you to only receive the money owed by council a year after the date of the sale of your home.
Body corporate or homeowner’s association
Much like the rates and taxes certificate, if the you live in a housing estate or sectional title development, it is possible that the homeowner’s association or body corporate requests that you pay their levies in advance to ensure that these costs are covered until transfer takes place.
Electrical Certificate of Compliance
The legislation stipulates that every homeowner is in possession of a valid Electrical Certificate of Compliance (ECOC) when selling their home. An ECOC is only valid for a period of two years.
If you have an ECOC that is older than this, or any electrical alterations have occurred during the two year period, you will be required to obtain a new ECOC by enlisting the services of a certified electrician. If no faults are found, the ECOC will cost between R500 and R1,000 depending on the size of the property and the call out fee. If faults are found by the electrician, the cost will escalate depending on the work that needs to be done to get the home compliant.
Electrical Fence System Compliance Certificate
If applicable, you will need to get an Electrical Fence System Compliance Certificate in addition to the ECOC. The electric fence system must be certified by an approved installer, and the certification is valid for two years.
Gas Certificate of Compliance
During the energy crisis, many households installed gas lines to supplement their electricity usage. These homeowners will be required to obtain a certificate of conformity which indicates that the installation has been done by a qualified technician.
A Gas Certificate of Conformity is to be issued when there is a change of ownership. This certificate is valid for five years.
Beetle Infestation Clearance Certificate
While not compulsory, it has become standard practice for homeowners in the Western Cape and KwaZulu-Natal regions to provide the buyer with a beetle clearance certificate which is valid for three to six months. In fact, in many coastal areas, a beetle clearance certificate has become a written condition in the sales agreement.
Did you know? Banks and insurance companies will often request a certificate on transfer if the home is situated in an area known to be infested.
A home inspection is not a requirement but can be a helpful tool if you want to know what defects the home has and what needs to be repaired. If you do decide to go this route, it will cost you around R3,500 depending on the service provider used.
Understanding the possible costs involved in a property sales transaction will give you a far more accurate picture of what you can expect to get once the sale of your home has been finalised.