Selling your house is usually a way for investors to make a profit off of their purchase, but there are many unexpected expenses that might creep up.
It does not only involve a real estate agent, a moving company or a storage facility. There are many other things that sellers often do not bargain for and do not work into their budget.
To avoid the surprises of unexpected expenses, here is a quick checklist that will guide you on financial matters during the home selling process.
Preparing for them might just prevent a potential crisis:
Unexpected Expense #1 – Home staging
Home staging is not very common in South Africa, although the trend has been receiving more and more attention. This is especially present in the luxury sector where sellers love putting their expensive furniture and décor on display so that their house is shown in the best light possible.
Staging your home can work out wonderfully but it does require a small financial investment from the seller’s side.
Careful consideration is needed before deciding on staging your home in order to sell it. Weigh the pros & cons and don’t forget to refer to your budget.
Unexpected Expense #2 – Maintenance
Whether you are staging your home or not, you are probably going to need to do give your home some TLC before you sign it over to someone else. It has to look attractive and presentable after all.
This may include hiring professionals to clean your carpets and your windows, repainting the interior and exterior of the house and repairing roof tiles, gutters, leaking taps and light fixtures.
This may cost you more than you have budgeted for!
It would be best for you to fix and update these things as they break so that you don’t have to spend as much when you want to sell.
Unexpected Expense #3 – Getting a professional inspection done
Home inspections are usually paid for by the buyer and this happens after the offer is accepted, but it is strongly recommended that you as the seller have your own inspection done before you list the home (the so-called pre-listing inspection).
By doing this, sellers can avoid nasty surprises that might pop up during a buyer’s inspection and tend to anything that needs fixing before continuing with the selling process.
You are going to save a lot of money in the long run and it is just one less thing for you to stress about.
Unexpected Expense #4 – Bond cancellation fees
When a seller has a bond registered over a property, it must be cancelled on transfer, at which time the seller is responsible for the payment of the conveyancer’s fees for cancellation. This cancellation has to comply with certain legislation as well as the relevant financial institutions’ procedures.
Several costs will be added to the month-end balance before cancellation, such as premiums and life insurance premiums, that would have been debited to the bond account in the next three months, legal costs, and interest and retention amounts.
Penalty fees can be avoided by giving the bank proper notice of the intention to cancel the bond.
Unexpected Expense #5 – Compliance certificates
Sellers need to obtain an Electrical Compliance Certificate, Electrical Fence Certificate, and Gas certificate before selling. In some cases, an Entomologist Certificate might also be required (mostly in the coastal areas).
Many financial institutions and insurance companies are also asking for copies of the registered building plans of the property, as well as an occupation certificate before granting a bond or providing insurance.
Thus, it is recommended that sellers employ a draftsman to redo and submit plans for approval before listing. This includes any new additions such as things like the pool, the patio, the carport or anything additional that is not on the original plan.