Looking to buy a home? Be aware of extra costs when buying a house

Fairly frequently, conveyancing attorneys handling the purchase and transfer of residential property find themselves having to deal with home buyers who do not realise that there are extra upfront payments involved with the purchase. This is so even with some buyers who have gone a long way down the line to completing their purchase. They may even have put in an offer which has been accepted. This has indeed been our experience.

extra costs when buying a house


Reasons for the lack of knowledge of extra costs when buying a house

One reason for this lack of knowledge is that some estate agents might fail to help their buyers understand those extra costs involved in the purchases they hope to make. This can then lead to the sale eventually being cancelled despite all the work they have already put in.

Reasons for failure to inform of extra costs when buying a house

A reason for this failure to inform may be that estate agents are afraid that the extra costs will scare the buyer off.

This is understandable because, although some banks will factor transfer and other costs into their bonds, a great many will insist on these being paid at the outset. On a R950,000 home, for example, the transfer duty as well as the FICA and Deeds Office costs plus VAT could amount to R28,000: a sum certain buyers might not be able to lay their hands on at that time. Generally it seems that certain agents hope that once the purchase has been accepted the buyer will somehow make a plan, possibly by raising a personal loan, but in today’s market this can be difficult to do.

Generally speaking, some of the best advice that an estate agent can give to a new home seeker is to lower his sights and to delay upgrading to a new home until a very significant sized deposit can be paid.

If you need assistance through this process, please do not hesitate to contact us at [email protected].

Images courtesy of Stuart Miles and Salvatore Vuono at FreeDigitalPhotos.net.

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