News & Updates

WHO PAYS FOR WHAT IN THE PROPERTY TRANSFER PROCESS?

Apr 26, 2022

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TRANSFER COSTS DEMYSTIFIED 

Buying or selling property is a very important financial decision in the life of most people. The process of buying or selling a property remains daunting and somewhat mysterious,   and as the costs involved are significant, this is an important factor. At FHA we believe in keeping our clients informed so that they can make sound decisions. So, who pays for what when purchasing and selling a property in South Africa? 

The Golden Rule – the Purchaser bears the costs of transfer when buying a property.

Exception to this Rule – the Seller is liable for, inter alia, estate agents’ commission, bond cancellation costs and the costs associated with the compliance certificates.

Let’s take a look at these costs for the Seller and the Purchaser in more detail below…

 

PURCHASER

The Purchaser is liable for all the usual costs relating to the transfer of the property in terms of the sale agreement.  We have included below an example of a pro forma account which is presented to a Purchaser when signing transfer documents. This account is dependant on the value of the property and the deeds office fees, rates at which transfer duty is calculated, and transfer fees are all prescribed annually. Our useful transfer and bond cost  calculator  www.fha.law.za/costcalculator will allow you to obtain cost indications at your particular purchase price or bond value.

SELLER

The Seller is also liable for certain costs in the transfer process. These include payment to the Estate Agency of the commission due, the costs of obtaining the Compliance Certificates (electrical, water, gas, electrical fence and beetle, where applicable). The seller will also need to pay the municipal account upfront and in advance so that a clearance certificate can be obtained. 

The Estate Agent’s commission is negotiated by the Seller with the agent and paid from the proceeds of sale to the estate agency on transfer. 

Should the Seller have a Bond that is to be cancelled the Bank will appoint attorneys to attend to the cancellation thereof and settlement of any amounts outstanding.

Below is an example of a draft final account sent to a Seller on registration of transfer.

Please contact us should you have any further queries with regards to who pays for what in the transfer process.