Selling a property in South Africa involves more than finding the right buyer and signing an agreement of sale. There are a number of costs, certificates, legal requirements and financial considerations that sellers should take into account before putting their property on the market.

At Property Monopoly, we believe an informed seller is a prepared seller. Understanding the potential costs upfront can help you make better decisions about your asking price, your next property purchase and the amount you can expect to have available after the sale.

What costs should you consider when selling your home?

1. Bond cancellation costs

If your property is still financed through a home loan, the outstanding bond will need to be cancelled when the property is transferred to the buyer.

The cancellation process involves attorneys appointed to handle the cancellation of the existing bond, and these costs are generally for the seller's account.

It is also important to speak to your bank before selling. Depending on the terms of your home loan, the bank may require notice of your intention to settle the bond. Failing to provide the required notice can potentially result in early termination or penalty charges.

Tip: Request an up-to-date bond settlement figure from your bank before you list your property. This gives you a much clearer idea of what will remain after the bond is settled.

2. Compliance certificates

Depending on your property and the applicable requirements, you may need to provide various certificates of compliance before transfer can take place.

These may include:

  • Electrical Certificate of Compliance
  • Electric Fence Certificate
  • Gas Certificate
  • Plumbing Certificate
  • Beetle or woodborer certificate

The exact requirements can depend on the property, its location and the circumstances of the sale.

If your certificates are old or your property has had alterations since the last inspection, it is worth discussing this with your estate agent before accepting an offer.

Tip: Don't wait until the day before transfer to discover that work is required. Identifying potential compliance issues early can prevent delays and unexpected expenses.

3. Municipal rates and other outstanding charges

Outstanding municipal accounts can affect the transfer process.

Before transfer, the relevant municipal rates, taxes and service charges generally need to be addressed, and the conveyancing attorneys will obtain the necessary figures and clearances.

If you own a property within a sectional title development, estate or homeowners' association, there may also be:

  • Body corporate levies
  • Homeowners' association levies
  • Special levies
  • Other estate-related charges

Your conveyancing attorney will assist with determining the amounts required as part of the transfer process.

4. Moving costs

It is easy to focus on the property transaction itself and forget about the cost of actually moving.

Depending on your circumstances, you may need to budget for:

  • Professional movers
  • Storage
  • Packing materials
  • Cleaning
  • Repairs or touch-ups
  • Temporary accommodation
  • Utility connections or reconnections

These costs may not appear on the final property statement, but they can have a significant impact on your overall budget.

5. Transfer costs – who pays?

One of the questions we are often asked is:

"Do I have to pay the transfer costs when I sell my home?"

In a typical South African residential property transaction, the buyer generally pays the transfer costs associated with transferring ownership into their name.

However, this does not mean that there are no legal or other transaction-related costs for the seller.

The seller may still have costs relating to bond cancellation, compliance certificates, rates and levies, and other expenses associated with the transaction.

It is therefore important to distinguish between buyer transfer costs and the various seller-side costs involved in a property sale.

6. Capital Gains Tax

Capital Gains Tax (CGT) is another consideration when selling property.

Whether CGT applies — and how much may be payable — depends on factors such as the property's use, ownership circumstances, the gain made on the sale and applicable exemptions.

A property that qualifies as your primary residence may benefit from the applicable primary-residence exclusion, subject to the relevant tax rules and requirements.

Because CGT can be complicated, sellers should consider obtaining advice from a qualified tax professional or accountant where necessary.

Your selling price isn't necessarily your net amount

This is perhaps the most important point for any seller to understand.

Imagine you sell your home for R4,000,000.

It does not necessarily mean that R4,000,000 will be available to you after transfer.

Before the balance is paid to you, various amounts may need to be settled, including your outstanding bond and other applicable costs.

Your final proceeds could therefore look something like:

Selling price
LESS: Outstanding bond
LESS: Bond cancellation costs
LESS: Estate agent commission
LESS: Compliance-related costs
LESS: Rates, levies and other applicable amounts
LESS: Potential CGT
= NET PROCEEDS

The actual amounts will depend on your individual circumstances and the details of your transaction.

Why should you calculate your net proceeds before selling?

Knowing your potential net proceeds can be particularly important if you are selling your current home in order to purchase another property.

For example, you may be looking at a new home and thinking:

"I'll have R1 million available as a deposit once my house sells."

But if you have not calculated your selling costs, your actual available amount could be considerably different.

Getting a realistic estimate before listing allows you to:

  • Set realistic financial expectations
  • Understand your available equity
  • Plan your next property purchase
  • Budget for your move
  • Avoid unexpected financial surprises
  • Make informed decisions when negotiating your selling price

Before You Put Your Home on the Market

Before listing your property, we recommend taking a few important steps.

Speak to your bank

Request an up-to-date bond settlement figure and establish whether any notice period or potential early termination costs apply.

Check your compliance certificates

Find out which certificates may be required and whether any work could be necessary before transfer.

Check your rates and levies

Make sure you understand your current municipal, body corporate or homeowners' association position.

Work out your estimated selling costs

Ask your estate agent for a seller's cost estimate based on your expected selling price.

Determine your likely net proceeds

Knowing approximately what you will walk away with is far more useful than simply knowing your property's selling price.

Thinking About Selling?

Selling your home is a major financial decision — and having the right information before you list can make the process significantly easier.

At Property Monopoly, we don't just help you put a property on the market. We help you understand the process, prepare your property and navigate the journey from valuation through to transfer.

If you're considering selling your property in Mossel Bay, Hartenbos or the surrounding Garden Route, talk to us before you make your decision.

Let's work out what your property could be worth — and what you could potentially walk away with.

PROPERTY MONOPOLY

Disclaimer: This article is intended for general informational purposes and does not constitute legal, tax or financial advice. Property transactions and individual circumstances differ. Sellers should consult the relevant conveyancing attorney, bank and/or qualified tax professional for advice specific to their circumstances.