Looking for a property for sale? Understand these hidden costs first
Buying a home is one of the biggest financial decisions one can make – especially when it comes to the luxury market. When seeking a new property for sale, it can also be easy to underestimate your budget. This is because there are plenty of hidden costs involved in buying and owning a home – and first-time buyers are not always aware of what these costs entail. Before you even begin budgeting for that property for sale you have your eye on, it is wisest to get a sense of what future expenses you may face. Along with buying the house, there are legal and administrative fees for which one must plan. Having the funds already in place to land the residence of your dreams makes the entire process easier and more efficient. If you are currently shopping for a new home, then below are some key financial considerations.
The cost of legal and administrative fees
While buying their ideal property for sale, many first-time buyers are left stunned and dismayed at the administrative fees they need to shell out. When transferring ownership of a property, conveyancing attorneys (bond attorneys and transfer attorneys) must be paid by the buyer. A bond attorney is appointed by the buyer’s bank to register the new home’s bond and prepare the legal documentation. The transfer attorney is appointed by the seller of the home, and they ensure all legal proceedings are followed correctly and that the sale is lodged with the Deeds Office. Conveyancing fees are sometimes negotiable but are usually charged in relation to the value of the property.
One must also keep the transfer duty tax in mind, which is a fee paid to the South African Revenue Service (SARS). This amount must be paid within six months of purchasing the new home for sale.
Once you land the sale and own the property, your bank will require you to apply for homeowner’s insurance. This is building insurance that covers the infrastructure against damage caused by things like natural disasters, fire, or theft. This insurance, unfortunately, does not cover possessions within the home, but an additional policy can be taken out to extend your coverage to your belongings and assets.
Rates and taxes
For freehold properties that offer buyers full title ownership, certain rates and levies need to be paid. These fees vary, depending upon the value of the home and the area in which it is located. They cover things like weekly refuse removal and sewerage use. Depending on where you stay, you may have to contribute towards a homeowner’s association too. Those who have invested in a sectional title for sale will have to pay a levy as set out by the body corporate.
Covering your utilities
Freehold homeowners will also need to register the home’s connection to electricity, water, internet, and telephone lines (depending on their household needs). Monthly payments must be made towards these services once they are connected.
Relocating is a major upheaval and the costs involved can be astronomical if you have a lot of furniture and belongings. To keep costs low, it is helpful to try and move everything yourself, but this might be a demanding endeavour that adds to the stress of leaving your old home.
Refurbishments and renovations
Apart from potentially needing new furniture and appliances, you may have to update or repair a lot of your new home’s existing infrastructure. Remodelling projects come with a hefty price tag, and even general repairs can cost a pretty penny. These, fortunately, can usually be tackled over time.
If you’re a first-time buyer looking for a gorgeous home in the luxury market, then let us at Fine & Country South Africa help you find a property for sale that suits both your budget and your taste. For more information, click here.