Buying property is one of the most rewarding investments you can make – but there are several additional costs that come with the privilege of being a homeowner.
Most people are aware of the average 10% deposit required to secure a bond. But did you know that you should actually be budgeting for 20% of the purchase price in cash?
READ MORE: Strategies for paying off your bond faster
“If you aren’t aware of everything you’ll need to pay for, it can be quite a surprise as the process unfolds,” says Property Fox co-founder Ashley James. “For instance, when buying a home you’re likely to need about 10% of the purchase price in cash to cover fees such as lawyers’ and bond fees as well as moving costs. You’ll also need about 10% in cash for the deposit. So that is 20% of the price of the home in cash.”
If you’re selling your home, don’t make the mistake of failing to factor in your estate agent’s commission fee, which generally hovers around the 7% mark.
“This decreases the ‘take-home’ amount from the sale,” James says. “Sellers may also have to cancel their existing bond, which incurs a fee and they have to pay for electricity certificates and beetle certificates as well as moving costs.”
READ MORE: The pros and cons of a 30-year bond
As new players in the property market, Property Fox is on a mission to help South Africans become comprehensively prepared for all the financial costs involved in a property transaction.
The useful infographic below unpacks exactly what you need to think about, whether you’re selling or buying a home.