What costs can you expect when buying a home?
Buying a house can be challenging, especially if it is your first time. Before you buy your dream house, you need to become familiar with the costs involved in the process. There are many factors to consider before making a big financial commitment. Whether you plan to buy a flat or a house, it is critical to understand all costs in order to save time and money.
Taxes and other expenses of property ownership, such as once-off payments and legal fees, are among the concerns. If you are unprepared, the costs you will incur before and after closing on a house can be a nasty surprise. Here are some costs you can expect:
1. Home loan
The bond payment is the first cost to consider when purchasing a home. It certainly makes sense if your home is the most significant purchase you'll ever make.
However, you can budget for a few fees, such as the house loan initiation charge, which is often a fixed price (depending on the bank) that you pay for processing your home loan application.
2. Bond registration
When registering a bond, you must make a payment before the bond can be officially registered. After the home loan is approved, the bank will hire a conveyancing attorney to record your bond, and you will have to pay registration fees directly to the attorney.
The amount of your house loan will influence this charge. Before bond registration, the deed office gets it. The buyer's bond must be registered simultaneously with the seller's bond when it is cancelled, and the transfer is recorded at the deeds office.
3. Fees related to registration: sundries
You should be ready to cover the cost of mailing all necessary documents to register the property in your name, including the bond registration and attorney's fees. Despite the fact that transfer fees vary, the buyer still pays the transferring attorney to record your ownership with the deeds office. And remember, the buyer covers all these costs.
4. Conveyancer's fee
After purchasing a property, ownership is transferred to the new owner, which requires the creation of a new deed of transfer and registration in the deeds office. Budgeting for this expense is crucial since the seller appoints the conveyancer. The buyer should be ready to acquire the property and is responsible for paying the fee during the buying process.
As a buyer, you must have reasonable expectations of the costs associated with the legal process. The South African Law Society sets rules about how much a conveyancer can charge for bonds based on how much a house costs.
5. Transfer duty fees
This process is about changing ownership. When you buy a house, you'll have to pay transfer fees to the state for it to recognise the property transfer from the seller to the buyer. The transfer duty is a tax based on the property's value that is paid when the seller's name is changed to the buyer's name, and the property comes with rights to land and fixtures.
The transfer duty amount you'll be expected to pay depends on the property's purchase price. There is no transfer duty paid on properties worth less than R1 million. If you paid R 1 000 001 or more for a house, you would be charged 3% of the property's value.
6. Moving costs
Moving expenses are always expected when moving to a new residence, especially after the lengthy conveyancing process. You'll need to consider moving costs, which can be very expensive depending on where and how many items you'll be moving. First, look for a credible mover online and obtain quotes from at least four companies to check rates and whether they'll cover any losses. It would help if you also looked at company reviews and rankings to ensure that your items are in safe hands.
New buyers often run into the most trouble when they need to account for the expenses of buying a house. Before making a purchase, talk to an expert or get in touch with us to find out how to buy a property at Tshenolo Properties.
