SELLER TIP#5: KNOW THE COSTS INVOLVED
PUBLISHED 17 AUG 2016
In our second last tip for sellers receiving an offer to purchase, we talk about the costs involved.
Although you, as the seller can appoint the transferring attorney, the purchaser is responsible for payment of their fees, disbursements and the transfer duty.
The purchaser is also responsible for the bond attorney’s account, if applicable.
The seller will however be responsible for the cancellation attorney’s costs in the case where you have an existing bond over the property that you are selling. The standard fee as prescribed by the Law Society is approximately R2 500 for the first bond to be cancelled and R200 for every subsequent bond.
The existing bond over your property has to be cancelled to enable the unencumbered transfer of your property into the name of the purchaser. Even if the bond is paid up, it still has to be cancelled at the Deeds Office. The cancellation of the existing bond will be effected simultaneously with the transfer of the property at the Deeds Office.
In terms of the National Credit Act the bank may charge you penalty interest if it is not given 90 days’ notice of your intention to cancel the bond. We advise you to immediately upon placing the property in the market, give written notice to the bank of your intention to cancel.
If the bond is cancelled during the 90-day period, pro rata penalty interest will be charged for the remainder of the penalty period. The penalty interest per month is equal to a month’s interest payable on your bond.
As you will discover, there are also a few other expenses for which the seller is liable, for example the electrical, gas and electric fence certificates.