So you have started working or have worked long enough and you are now ready to buy property. Are you aware of all the costs that are involved in buying a new home, over and above the Purchase Price of the property?
Purchasing a new property can be both a daunting and as exciting exercise. Before embarking on the journey of purchasing your new home, it is important to know and understand the costs involved in buying a new home.
When purchasing a home, you will incur 3 major sets of costs which include transfer costs, bond registration costs and cancellation costs for an existing mortgage bond.
Transfer costs include various costs that you, as the buyer will incur in order to cover the administration and registration of the transfer of the property into your name. The bond registration costs, which are also paid by you as the buyer, include the various costs in respect of the registration of the mortgage bond over the property, should you be acquiring a home loan and not purchasing the property in cash. The bond cancellation costs for the cancellation of the existing bond over the property, are for the account of the seller of the property. The seller would also be responsible for the estate agent’s commission, the costs for clearance certificates such as electrical, borer-beetle, and rates & taxes.
The seller of the property can nominate the transferring attorneys, known as conveyancers, to whom the transfer costs will be paid to. The various banks elect the bond registration attorneys, from their panel of approved attorneys, to whom the bond registration costs will be paid to, for the registration of the mortgage bond on behalf of the Bank at the Deeds Offices. The banks also elect the bond cancellation attorney who is also a conveyancer from their panel of attorneys to attend to the cancellation of the bond at the Deeds Office.
The transfer costs and bond registration costs depend on the purchase price of the property as well as the value of the loan.
For example, to purchase a property with a purchase price of R1,200,000 and a bond amount of the same amount, the costs that you would incur are as follows:
As a rule of thumb, you should allow for between 8% and 10% of the amount of the purchase price of the property for all the other costs involved in purchasing a home. This amount does not include the deposit.
When buying property, you don’t want to be caught surprised by any of the hidden and unexpected costs and you want to make sure that you have saved up enough and set aside enough budget for the costs you will incur.
In our next post we will go into more detail of each of these costs and discuss in details which party in responsible for which costs.
It is important when selling or buying a home to involve attorneys that will effectively handle the transfer of ownership of the property, with efficiency and transparency.
BKJM Attorneys does just that as we will ensure that your property transaction is handled with care and as quickly as possible.
For all your property related needs and any other matters related to property law, Contact us. and we will smoothly work through the process with you.
W: www.bkjmattorneys.co.za
E: khumi@bkjmattorneys.co.za
T: +27 71 614 5903
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