Many homeowners are surprised by the costs involved in selling their property. Most people understand that the agent earns a commission, but several other expenses arise during the sale process that sellers need to plan for.
In my experience, sellers who understand their costs upfront make better decisions. They price their property correctly, plan their finances for the next purchase, and avoid unpleasant surprises when the conveyancing attorneys send their account. Before you list, I also recommend understanding how your property's market value is determined, as this directly affects your net proceeds.
1. Estate Agent Commission
Commission is the largest single cost for most sellers. In South Africa, commission is negotiated between the seller and the agent and typically ranges from five to seven percent of the sale price, plus VAT at fifteen percent.
On a property selling for R1.5 million, a six percent commission would be R90,000 plus VAT of R13,500, totalling R103,500. This amount is deducted from the proceeds of the sale by the conveyancing attorney at registration.
Commission is only paid on successful registration of transfer at the Deeds Office. You do not pay commission if the sale does not proceed to registration.
2. Bond Cancellation Costs
If you have an existing home loan over the property, your bank needs to cancel that bond as part of the transfer. The bank appoints a bond cancellation attorney to handle this and the costs, typically around R6,000, are for the seller's account.
There is also an important timing consideration. You are required to give your bank ninety days written notice of your intention to sell. If you do not give this notice and the transfer registers sooner, the bank may charge penalty interest for the shortfall in notice. I always advise sellers to notify their bank as soon as they decide to sell, even before the property is listed.
3. Compliance Certificates
South African law requires sellers to provide certain compliance certificates as part of a property sale. The specific certificates required depend on the property and its features. Common certificates include:
- Electrical Certificate of Compliance: Required on all residential property sales. An accredited electrician inspects the electrical installation. The inspection fee typically ranges from R500 to R1,500, but any faults identified must be repaired before a certificate is issued.
- Electric Fence Certificate: Required if the property has an electric fence. Cost is typically R500 to R1,000.
- Gas Compliance Certificate: Required if the property has gas appliances. Cost is typically R500 to R1,200.
- Plumbing Certificate: Required by some municipalities. Check with your local municipality and your conveyancing attorney.
- Beetle Certificate: Required in coastal regions for certain property types. Less common in Gauteng but sometimes specified in the offer to purchase.
I advise sellers to get these inspections done early. See the full document and compliance checklist for sellers for what you need to have in order.
4. Rates Clearance Certificate
Before a property can be transferred, the municipality must confirm that all outstanding rates, taxes, and utility accounts are fully paid up. The conveyancing attorney applies to the municipality for a rates clearance certificate.
Importantly, municipalities typically calculate clearance figures by taking what is currently owed and adding three to four months of estimated charges in advance. This advance payment can amount to several thousand rands depending on your monthly rates. The municipality refunds any excess once transfer is complete, but this refund can take several months to process.
5. Capital Gains Tax
If you are selling your primary residence, the first R2 million of capital gain is exempt from Capital Gains Tax. You also have an annual exclusion of R40,000. Most homeowners selling their primary home in the Roodepoort and Krugersdorp price range will not pay Capital Gains Tax.
If you are selling a second property, buy-to-let investment, or commercial property, different rules apply. I strongly recommend discussing your specific situation with your tax advisor or accountant before proceeding.
6. Levy Clearance Certificate
If your property is in a sectional title complex or a homeowners association estate, the body corporate or HOA must confirm that all levies are paid up to date before transfer can proceed. The fee for this certificate is typically R500 to R1,000. Any outstanding levies or special levies must be settled before transfer.
Estimated Total Seller Costs
As a broad guide, total selling costs typically range from eight to twelve percent of the sale price. On a R1.5 million property with a six percent commission and bond cancellation:
- Commission plus VAT: approximately R103,500
- Bond cancellation fee: approximately R6,000
- Compliance certificates: R1,500 to R4,000 (excluding repairs)
- Rates clearance advance: varies by municipality and monthly rates account
Conclusion
Understanding your selling costs before listing is essential. It helps you set a realistic price, understand your net proceeds, and plan your finances for the next chapter. When I meet with sellers for a free home evaluation, I always walk through these costs in detail. If you want to understand how long the full sale process takes or what happens step by step after an offer is accepted, those guides cover both in full.