This was asked by our listener “how do I sell my property”. Many ways to skin a cat, of course. We will speak about it in this episode and help you understand how you leverage each method and make the most out of selling your property!
Standard method: Use of an agency
The old-fashioned way of selling properties in South Africa is to mandate real estate agents to advertise your property. They of course charge a commission upon successfully transferring the property to the purchaser. To give an indication of the market-related commission rate, it’s around 5% of the signed purchase price. Of course, there could be higher or lower ones, the crucial thing is to know what you want in your pocket at the end of the day.
No agency, no problem
If you are not willing to pay for commissions to the agent, you can sell your house privately directly. That obviously involves more admin work. For example, you must appoint a transfer attorney to draft the sale agreement for you; you need to advertise your property at your own cost; you have to do all the show-arounds and contacts; checking the affordability of the purchaser, etc. It’s a lot of work but nowadays owners are willing to do it because it saves costs.
Another way of selling your house is through the auction house, which we spoke about in our last episode. If you know for sure that your property is in high demand, chances are you may get a higher price for it as buyers would compete impulsively at the auction.
What are the hidden costs?
Knowing the options for selling your property is great, but it is equally important to know who’s responsible for what costs. Reeflords has broken down some of the typical costs for you for reference:
Seller’s costs: agent’s commission; COC; Insurance Certificate; Levy Clearance; Rates Clearance; Other mutually agreed costs;
Purchaser’s costs: transfer duty if applicable; transfer attorney cost; bond registration cost; initiation fees and other bank charges; occupational rent;
Many sellers ask a critical question “am I liable for defects in the property before I sell”. Million-dollar question! If you remember we touched on the term “voetstoots’ many times in our podcasts. So the answer, fortunately, is no, you are not always liable for all defects in the property, however, you must identify and notify all defects to agents and purchasers, so they are aware of what they buy into. Or your agent will be in breach of the Property Practitioner Act (PPA), which consequently may nullify the sale.
Words of advice
Finding the right buyer can be quite difficult, especially when we are in a buyer’s market currently where buyers have so many options and room for negotiation is extensive! It’s a good idea to be a bit nosey in your neighborhood and see what value you usually get from sold deals in the area. Compare apple with apple! Should you have any property-related questions, please feel free to drop us an email on terry@reeflords.co.za.
Don’t forget to check out our Facebook and LinkedIn pages – Reeflords Property Development. Think Home, Think Reeflords.
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