Buying a house is more expensive than the sale price. New buyers may not know that the full cost of buying a house in South Africa is not what they see listed as the property price.
Buying a house is a massive financial decision. It’s important to remember that there are additional costs associated with purchasing a house. In this article, Bidvest Insurance outlines some of the important expenses that buyers need to be prepared for.
Are there extra fees you can expect when buying a house?
Yes, unfortunately there are extra fees you may not think about when you decide to buy a house. It’s important to be prepared for these additional costs, as they could either make or break your deal. These extra fees include bond registration fees, if you’re taking out a bond, property transfer fees, and further unexpected fees.
What are bond registration fees?
If you’re taking out a bond to purchase your dream home, your bank will charge you an administrative fee for initiating your bond and opening your bond account. This fee is called a bond registration fee. Bond registration fees vary depending on which bank you decide to sign up with for your bond. Some banks charge a fixed fee, while others charge a base fee, plus a certain percentage of the loan amount. For example, the bond registration fees for a R2m bond with no deposit, at an interest rate of 9.75% over 20 years, would cost roughly R40,000. It’s important to keep this in mind when taking out a bond.
While you can sometimes include this bond registration fee within your loan amount, it’s always recommended to pay this upfront whenever possible, to avoid any unnecessary interest charges.
What are property transfer fees?
Property transfer fees are the fees paid to the attorney who handles the transfer of ownership of the property from the seller to the buyer. This attorney is usually designated by the seller. The buyer of a property is solely responsible for the transfer fees. The cost of transfer fees will change in accordance with the selling price of the property.
For example, the transfer fees for a R2m bond with no deposit, at an interest rate of 9.75% over 20 years, would cost roughly R91,000.
Property transfer fees may come as quite a surprise, especially if you weren’t expecting them. With Legal Angel from Bidvest Insurance, you will get discounts on property transfer fees. Get Legal Angel from Bidvest Insurance today.