Many clients find themselves between an rock and a hard place when confronted with “unexpected costs” of attorney’s accounts when purchasing a property.
It is important for clients, seller, as well as buyers, to make sure that they are informed of all the costs involved when buying or selling property in South Africa.
The costs incurred by the seller are, (which will usually be deducted from the purchase price by the attorney before payment is made to the seller) :
- Estate Agent's Commission;
- Conveyancer's Fees for cancellation of his bond over the property;
- Balance of the bond due to the bank, if there was a loan over the property
- Electrical and gas compliance certificates
- Infestation Clearance Certificates- applicable in certain provinces.
- Rates and Taxes certificate at the municipality
- Levy certificate at the body corporate
Sellers should keep in mind that the Balance at the bank and the municipal amount will be calculated for a couple of months in advance and will not be for the precise amount due to the institution. The bank and municipality will make a refund to the client directly for the surplus amounts.
The costs incurred by the purchasers, all of which are payable before registration, and usually on a set date as per the deed of sale, is:
- Deposit for the property
- Transfer costs to the attorney attending to the transfer of the property - this attorney is appointed by the seller
- Bond costs to the attorney attending to the bond registration - this attorney is appointed by the bank, and in some instances can be the same attorney as the transfer attorney
The purchaser will not be liable for the commission due to the agency, except when negotiated by the parties in writing on the deed of sale.
Clients should ensure that all costs are paid into the trust account of the attorney or estate agency and never pay any funds directly to the seller or an estate agent personally.
Also ensure that you receive invoices and receipts for all the funds requested by all the parties in the transaction and keep it in the safe for future referral.