The Costs Associated with Selling a House In Cape Town
When people decide to sell their properties and in particular, their houses in Cape Town, many sellers are not aware that there are selling costs that they must budget for. Even when selling affordable homes in Cape Town, the rules remain the same. The costs for affordable homes for sale in Cape Town, will vary proportionally.
The overall expenses involved are:
Repairs and renovations: Many sellers are not aware of the real impact that the condition of the property has on the final selling price of a property. Sellers of houses in Cape Town must realise the impact of the weather on their properties. They must realise that if they are not spending money on fixing and dressing up their property, they will most probably not realise top price for their property. One has to caution that sellers must have realistic price expectations, taking into account the condition of their property for sale in Cape Town. The other party to the transaction is the buyer. Many sellers expect that the sale of their property will transform them into a rich person. And the buyer expects a “bargain of a lifetime” when they buy a property. The buyer expects this property to make him/her instantly rich. Here at Nimsay Real Estate, we strive to be fair to both the seller and the buyer with the pricing of our property as much as we can.
Utilities and Maintenance: Sellers must be aware that they must hand the property to the buyer in the same condition it was when the buyer viewed it. So, sellers you must still maintain the beautiful swimming pool until registration of transfer. Utilities need to be paid up to date.
Home staging and preparation: A beautifully “dressed” home is much more attractive for a potential buyer than a house that is dressed shabbily. Expect the selling price to reflect the “look” of the property. Home staging should be seen as an investment and not an expense. Houses that have been staged tend to sell quicker and for a higher price than those who have not been staged. Home staging can involved decluttering, cleaning, and making minor and/or cosmetic updates and repairs. It can also entail adding and arranging furniture. Bringing in high-end furniture lends a more upmarket, luxurious and expensive appearance, which increases the perceived value of the property. It has been found that staged homes sell fetch higher prices and sell faster.
Compliance certificates: Every house for sale in South Africa is required to comply with the law regarding Compliance Certificates. You require a Plumbing Certificate, an Electrical Compliance Certificate, a Gas Compliance Certificate, and Electrical Fence Certificate and a Beetle Certificate. Your conveyancer will be able to tell you which certificates find application for you. These certificates are not cheap and can add to the cost of selling. Houses for sale in Cape Town, Houses for sale in Johannesburg, Houses for sale in Durban all have different compliance certificate requirements. But they are worth their weight in gold because the seller will have no comebacks from the buyer because you have complied with the requirements.
Real Estate Agent Commission: This is the one thing that sellers feel resentful of because they do not understand the importance of a good and professional Estate Agent. An Estate Agent is the only person in this scenario whose value is not always appreciated and valued. This is also the only person who works at risk, the only person who can walk away from the transaction with a loss. Because if the property does not sell, the only one who has to foot the bills is the Estate Agent. They still have to pay their photographers, their copywriters, their designers, the advertising costs, their cellphone bills, their fuel bills, car instalments, office rental, office expenses and utilities, never mind the cost of their time.
Many sellers feel that the Agent Commission is an ATM where they can withdraw funds for whatever expenses they incur with the sale of their house. If their offer is not the price that they would like it to be, they want to draw or deduct this shortfall from the Agents commission, without any regard for the expenses that the agent has incurred. The agent cannot recoup their reduced income from their service providers. They cannot tell the advertising people that their commission has been reduced, thus they can only pay the quoted amount less their reduction. Neither can they go to the photographer, or the designer, copywriter, fuel station, their landlord, their bank, etc.
It is imperative that the seller understands that the agreed payment is payable to the Estate Agent, whether the property sells after 1 day or after 60 days. Because the Estate Agents income and expenses have to offset each other with the various sales they make. With the one property they may have loads of expenses with little or no return, but then the next quick sale may offset some of the losses that was suffered with the other sales. There is also value in the professional services that the estate renders, whether the property is a quick sale, or not.
It is important that all parties respect their respective roles and responsibilities. Estate Agents cannot be expected to make the deals work by taking the price reduction in their commission, especially since some Estate Agents are highly qualified professionals which multiple qualifications that they use in the execution of their transactions. The seller has to factor in that they may only receive an offer that is 85-95% of their asking price and calculate their profit accordingly. Of course, this is dependent on whether the property was put on the market at the correct price.
Capital Gains Tax: sellers are advised to speak to their accountant when they decide to sell their properties and they have a second property. The accountant will be able to guide them what to do in order to manage their potential payment of Capital Gains Tax. This is not an expense but rather an investment because in the end you stand to save thousands of rands if you manage the sale of your property properly.
Moving Expenses: The petrol price is scandalous, almost as scandalous as the rand dollar exchange rate. That being said, we must budget for moving expenses. Not all moving companies are created equal, so you must factor in the cost of manpower, the care, safety and security of your belongings, etc. It is always better to choose a reputable moving company to ensure that your valuable belongings are safe, secure and handled with care.
This is one instance where saving a couple of rand can become costly. One hears the horror stories of furniture being damaged, lost, etc. If you have very valuable furniture, it may be a good idea to explore the cost of insuring your goods for the move.
One has to be circumspect with one’s belongings and with one’s expenses.
Miscellaneous costs – attorney fees, accounting costs: It is always prudent to budget for miscellaneous costs because this is one of the biggest monetary transactions that you will conduct in your life. If this goes well, who knows, you may want to repeat it a couple of times. But you wouldn’t want to repeat a transaction where you were caught off-guard and ill-prepared. Anything can happen, you may have to litigate if something goes wrong with your sales transaction and incur unbudgeted attorney fees, you may have to provide financials to the bank and have unexpected accounting fees, you may have to rent a property for a month or two if there is an unexpected delay, you may have unexpected repairs that pops out from nowhere, etc. It is always useful to have a budget for miscellaneous expenses.
The Costs Associated with Selling a House In Cape Town
When people decide to sell their properties and in particular, their houses in Cape Town, many sellers are not aware that there are selling costs that they must budget for. Even when selling affordable homes in Cape Town, the rules remain the same. The costs for affordable homes for sale in Cape Town, will vary proportionally.
The overall expenses involved are: