Buying a home is probably the biggest amount of money that most people will spend in their lifetime.
Here, we discuss the hidden cost of buying and owning a house
These are probably the biggest cost associated with buying a property.
But to give you an idea, on a R1 million bond, the transfer and registration is about R50 000, but could be different, if the house was registered in a company.
These fees are attorney's fees charged by the conveyancer and are guided by the Law Society's.
Certain agreements of sale provide that the purchaser is required to pay a deposit and lodge it with the conveyancers and, if you are taking occupation of the property prior to registration of the property into your name, you will be required to pay occupational rent.
While some homes are in perfect condition on the day of transfer, chances are you’ll have to do some cleaning, repainting and general repairs to make your new place feel more like home. Some of these will be essential, others will relate to your own personal taste or budget.
“You should definitely set aside some cash for unforeseen expenses,” says Rall. “Try to gain access to the property ahead of moving in, so that you can write up a realistic budget for what you will need to spend.”
You should also set aside a few hundred Rand for all the basic household maintenance items you will need, like detergents, brooms, cloths and polish.
And remember that houses need ongoing maintenance, so always keep some cash ready for unexpected expenses.
Traditionally, any fixture to the house - from curtain rails and doorknobs to air-conditioners - may not be removed when a house is sold. Yet these things often end up being grey areas and ending in resentment. Avoid confusion by:
You’ve bought the place; now you’re going to have to move in. Depending on where you’ve been living, and how much furniture you already own, you might have to hire a moving company to get you into your new home.
This costs anywhere between R5 000 and R15 000 in the same city, but most companies offer a discount if you move in the week and in the middle of the month, when demand is lower. You can also investigate mini move or bakkie-for-hire options, which would be cheaper, but perhaps a bit more work for you.
If you are buying a freehold property (not a sectional title), you will need to register for your water and electricity connection, and your telephone and internet lines if you need those. These costs vary from area to area, and the internet fee will depend on the type of connection that you want, and whether the relevant lines are already installed.
Generally speaking, put aside around R1 000 to R3 000 for connecting the electricity, water and telephone – but you may be required to put down a deposit with the telephone company as well, depending on your credit profile. Investigate the different internet connection costs with your service provider.
And obviously, once those services are connected, you will have to pay for them every month.
If you have purchased a freehold property, you will have to pay rates and taxes, which can be anywhere from a couple of hundred to a few thousand Rand, depending on the value of your property and the area. Rates cover sewerage usage and garbage removal, while your taxes are calculated against the value of your property. The estate agent should have included these rates in the information about the property when you were house hunting, but if you need to find out you can ask the municipality representative when you register for water and electricity. These rates will stay the same every month.
If you have bought into a sectional title, the apartment block’s body corporate will have set a levy to pay every month for the general upkeep of the buildings.
When buying a new home, it’s a good idea to assess the security of the other houses in the area, and find out about the crime rates from the local police station, and then update your own security accordingly. And you’ll have to budget for a monthly armed response fee as well.
“Many security companies offer a package deal on installation with a contract for a certain term,” says Rall. “Be sure that you’re happy with the length of the commitment before signing a deal like this, but it can be a very cost-effective way to get a good security system in place.”
Your bank will insist that you have homeowners insurance in place to cover any structural damage to the property. This is generally affordable with competitive options available to you and can be included in your monthly bond repayments. However, your possessions are not covered by this insurance, so it’s a good idea to explore the costs of an additional policy to cover you for theft.
Rall also cautions that if you have existing insurance cover, you must inform your broker of your new address as this can change the risk factors in your policy and alter your premiums.
Once you have a home, you will want to fill it with beautiful things. Of course, this kind of refurbishment is a luxury, and one that can be put off until you have settled in. However, if there are any items that are vital to making your life in your new home comfortable, then get a costing on these and factor them into your budget.
“Owning a new home is liberating, but the financial commitment can feel like a burden,” says Rall. “With forethought and planning, you can budget for the major expenses that are likely to come your way, which will give you a bit of control and confidence as you settle into your new home.
The value of your property is dependent on how well the block is run. Put on your detective cap and ask the body corporate some tough questions. Request:
She advises that prospective buyers should make a list of all of these costs and put down an approximate figure next to each item, before signing a sale agreement which binds them to the purchase of their dream home.
