Before selling calculate ancillary costs

The ancillary costs of moving from one home to another are far larger than most people recognise, says Lanice Steward, MD of the Cape estate agency, Anne Porter Knight Frank.

“If people sat down and calculated what they are letting themselves in for,” she said, “they would, at least in some cases, decide against upgrading, downscaling or simply moving for a change of scene, or to be closer to certain schools.”

Supposing, said Steward, that the homeowner arranged to sell his current home at R1,5 million and move to one of R2 million, the ancillary costs for which he will be liable will include

  • R15 000 to R200 000 in agent’s fees,
  • transfer costs of R130 000,,
  • bond registration costs of R12 000,
  • furniture and baggage transport costs of R15 000 to R20 000.

“The move from one house to another will therefore cost “extra payments” in the region of R250 000 – and this is an outlay on which there will be absolutely no returns. In this instance the real cost of moving is some 25% higher than the R1 million bond probably taken out to achieve the upgrade.”

If the reason for moving is to gain extra facilities or space, it might well pay, said Steward, to spend a fairly large sum on upgrading your existing home.

“At APKF we have seen instances in which R150 000 spent on an existing home has not only transformed its efficiency and appeal, it has also added three or four times that amount to its value.”

If the seller is downscaling, the same costs will be incurred – and are likely to eat into whatever profit is made by going smaller.

“In many instances we now advise downscalers to stay where they are until they are ready for a move to a retirement village,” said Steward.

Article by: www.anneporter.co.za