Video: Watch out for property purchasing costs

I was recently speaking to a young woman who had just bought her first house. She admitted that she had been caught completely off guard by all the expenses she had to incur.

She discovered that buying a house is a lot more expensive than just being able to afford the monthly repayment and having a 10% deposit.

These are some of the costs you need to consider:

Transfer costs include conveyancing attorney fees who handle the transfer of ownership from seller to buyer. The total cost will depend on the value of the property.

Bond Registration costs are charged if  you are applying for a mortgage. You pay another set of attorneys – so it’s double the legal fees. There is also a bank initiation fee on the issuing of a new mortgage. Note that you can negotiate the legal fees with the bank.

Transfer duty is a tax paid on properties exceeding R900 000.

Municipal connections and deposits are required by most municipalities to transfer and connect council water and electricity services. These differ between municipalities and needs to form part of your upfront investigation. For example, Johannesburg charges two months deemed usage as a deposit.

There are also moving costs, telephone and Wi-Fi connections: These will all cost extra and may require installation fees.

You can expect to pay an extra 7% of the value of the property on additional expenses. For example on a property of R600 000 your expenses would be around R40 000 and on a property of R1.2 million your total costs would be around R66 000.
Property purchasing costsDon’t let your dream home become a financial nightmare – do your homework first.

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