CONVEYANCING – WHAT DOES IT COST?
Conveyancing and Bond Registration – Property is seen as an investment. That is immovable property, like a house, or a piece of land. First time home buyers need to get into the market and are often unaware of the hidden costs of buying property.
SHOPPING AROUND FOR A HOME
You have saved up for a deposit on a home. A date with the resident estate agent is set. You have identified the area where you would like to buy a house. You have even checked with a bank and got a pre-approved bond. Everything is set, and the family cannot wait to buy and move into their own home.
Finally, you find the perfect home, albeit just inside your budget. As you are about to sign the offer to purchase, the agent casually asks: “Do you want to include the conveyancing and registration costs into the bond?”
What conveyancing and registrations costs…..?
THE REAL COSTS OF BUYING A HOUSE
The purchase price for your dream home comes with some serious small print – conveyancing and registration costs. The Cambridge dictionary defines conveyancing as the process of moving the legal ownership of property or land from one person to another. These costs are variable and are calculated according to the Deeds Office Tariff based on the purchase price of the property.
When buying a home, you will therefore have to pay two sets of attorneys. The Transfer Attorneys doing the transfer of ownership from the seller to the buyer (conveyancing), and the Bond Attorneys, appointed by the Bank, for the registration of a mortgage bond.
HOW MUCH WILL CONVEYANCING AND REGISTRATION COST ME?
Although conveyancing itself only deals with transfer costs, for this post I will discuss all the costs that you may encounter when buying a house.
Transfer Costs (Conveyancing):
You will need an attorney to transfer the property into your name. For that privilege you will pay a fee to the Transfer Attorney, Postages & Petties, Deeds Office Fees, an Electronic Generation Fee, a FICA Fee, Deeds Office Search Fee, Rates Clearance Fees as well as Transfer Duty to the Government. Note that transfer duty is not applicable to purchase prices below R900 000,00. The Seller is responsible to pay rates and levy clearance, as well as to obtain any electrical clearance and other clearance certificates unless specifically agreed otherwise in the sale agreement.
Mortgage Bond Registration Costs:
You will also need to register your bond (if you intend to finance the property). This will require payment to the Bank’s Attorneys for Bond Attorney Fees, Postages & Petties, Deeds Office Fees, Electronic Generation Fee, Electronic Instruction Fee and Deeds Office Searches.
Quite a lot of money…
HOW DO I BUDGET FOR ALL THESE FEES?
You do not pay Transfer Duty (to the Government) if the purchase price is less than R900 000. However, you must still pay the attorney’s fee as well as the other costs related to the transfer of the property. Let us look at the total transfer costs payable (Note: The figures below are approximate and are valid as off 1 May 2017. It was originally compiled by GhostConvey):
Transfer (Conveyancing) Costs
|Purchase Price||Transfer Attorney Fee||Transfer Duty||Other Fees||Total|
|R900 000-00||R15 800,00||R0||R3 142,00||R18 942,00|
|R1 500 000,00||R20 700,00||R25 500,00||R3 948,00||R50 148,00|
|R2 000 000,00||R24 200,00||R60 500,00||R4 438,00||R89 138,00|
|R2 500 000,00||R27 700,00||R108 000,00||R5 153,00||R140 853,00|
|R3 000 000,00||R31 200,00||R163 000,00||R5 643,00||R199 843,00|
|R3 500 000,00||R34 700,00||R218 000,00||R6 133,00||R258 833,00|
|R4 000 000,00||R38 200,00||273 000,00||R6 623,00||R317 823,00|
|Bond||Bond Attorney Fee||Other Fees||Total|
|R900 000-00||R15 800,00||R3 147,00||R18 947,00|
|R1 500 000,00||R20 700,00||R3 948,00||R24 648,00|
|R2 000 000,00||R24 200,00||R4 438,00||R28 638,00|
|R2 500 000,00||R27 700,00||R5 334,00||R33 034,00|
|R3 000 000,00||R31 200,00||R5 824,00||R37 024,00|
|R3 500 000,00||R34 700,00||R6 314,00||R41 014,00|
|R4 000 000,00||R38 200,00||R6 804,00||R45 004,00|
IS THERE A WAY TO SAVE ON THESE COSTS?
It is the seller’s prerogative to select the transfer attorneys. However, one way to save is to convince the seller to allow you to use the bank’s attorney (where you will get the finance) to do both the transfer and the bond registration. In such a case, some attorneys may provide a discount on the bond registration fees.
However, with Yambu’s Legal Protection Plan, they will pay your Transfer Attorney fee for you. You can therefore save up to R38 200,00 on a R4mil property purchase. Visit this link for more information and peruse our legal protection product.