Conveyancing fees – what are you paying for
Blog article by: Michelle Orsmond
Purchasing your dream home is one of the most significant investments you will ever make. However, first-time buyers are not always fully aware of the costs associated with purchasing a home and what the services they are paying for entail.
The conveyancing services that a firm typically offers, includes the preparation and gathering of all documents required to finalise the registration of a sale once it is lodged with the Deeds office.
But not all property transactions are the same – each one carries its own delays and challenges, and a conveyancer needs to assist both the seller and buyer in this regard.
What does the seller pay for?
- Estate agent commission – The offer to purchase would stipulate the agreed percentage.
- The seller’s outstanding mortgage bond. This will be paid to the seller’s bondholder to settle any outstanding amounts. Once paid the seller’s bond is cancelled.
- The cancellation attorney’s fees for the cancellation of the existing mortgage bond. The transferring attorney collects the cancellation attorney’s fees from the seller and pays them over to the cancellation attorney on the day of registration.
- The municipality rates and taxes – The seller is responsible to pay all rates and taxes in advance. In practice, a clearance certificate is applied for a period of three months in advance.
- The body corporate levies – where a sectional title unit is sold, the seller is responsible to pay all levies payable to the body corporate. The managing agent will indicate when providing the levy figures to the transferring attorneys, for what period levies must be paid in advance. The purchaser will then refund the seller for the difference between the date of registration and the date to which levies were paid.
- The Electrical compliance certificates – this also includes an electrical fence certificate.
What does the purchaser pay for?
- Transfer duty payable to SARS
- Deeds office fees payable to the Deeds Registry for registration of the deed of transfer
- Transfer attorney fees payable to the transfer attorney for the registration of the deed of transfer
- Postage and petties to cover expenses
- FICA fees, payable to the transfer attorney to cover expenses for the verification process of the parties in terms of the Financial Intelligence Centre ACT.
- Deeds office search fees to cover expenses for electronic searches at the Deeds registry and for copies of title deeds
- Occupational rent
- Pro rata rates and taxes or levies – payable to the seller for the period from the date of registration till the end of the last month for which the clearance certificate was issued- which amount was paid by the seller in advance.
- If there is a mortgage bond to be registered in the purchase’s name, the purchaser will pay such an amount directly to the bond attorney. The purchaser will sign all documents related to the mortgage bond at the bond attorney who will furnish the purchaser with their account.
Conveyancing fees vs transfer duty?
- Conveyancing fees are based on guidelines issued by the Legal Practice Council of South Africa. They are calculated on the purchase price of the property or the capital amount of the bond.
- Transfer duty is a tax levy on the value of any property acquired by any person by way of a transaction or any other way. Transfer duty is exempt for sales below R 100 000 and is determined on a sliding scale thereafter.
- Transfer duty is a separate cost to transfer/ conveyancing fees
Conveyancing is a process which requires a significant amount of skill and expertise and a conveyancer is a vital cog in the home buying machine who will ensure that an offer to purchase meets all the legal requirements.
For more information, contact:
Michelle Orsmond – MichelleO@hammondpole.co.za