Real Estate Investor Magazine South Africa July 2013 | Page 30

GETTING STARTED

Commissions,
Costs & Your Bond

BY ANGELIQUE REDMOND
house into one that involves images, videos and
social and multi media. And an estate agent
who understands and can use these tools is an
invaluable asset.
When you are looking at buying a home,
before you even enlist the help of an estate agent
you need to know what sort of price range you
are going to be looking at, and that is where a
bond comes in. Unless you are able to pay cash
for the property, you will need to investigate
getting a bond. Below we look at options
and important facts you need to know about
getting a bond. Linda Rall, ooba KZN Sales
Manager, takes you through the need-to-know
information.

Costs you will incur
In addition to paying a deposit there are a
number of other upfront costs involved such as
legal costs, transfer duty, bond registration fees
and bank fees.

Repayment terms

What should you expect?

W

hether you are buying or selling
your home, you will at some point
encounter estate agent’s commission
and the process of applying for a bond. But what
exactly do the two entail? Let’s take a look at
estate agents commission first and what exactly
they do to earn their commission.

Inside Estate Agents & commission
Estate agents sel l or let residentia l or
commercial properties, businesses or land
for their clients. The role generally involves
valuing properties, which includes looking
at the property’s condition and comparing it
to others in the area to get the best price for
the client. They also market the property and
negotiate deals on behalf of their clients. While
you might consider going it alone, before you
do, consider what value an estate agent adds
to the process of both buying and selling your
home. Estate agents generally charge a fee of
up to 7.5%. This fee is not set and there is no
regulation in South Africa on what an estate
agent can charge for commission. This fee
should be looked at as an investment, as not
only is the estate agent investing in the process
of selling your property but is also an invaluable
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July 2013 SA Real Estate Investor

partner in getting your property to sell at the
best price possible in the best time frame. The
fee should be clearly discussed at the beginning
of the marketing process and should be done
after the home has been valued. The agent is
paid depending on what the home sells for, so
it is in their best interest to get the best possible
price for your home.
When an agent is asked to come and value
your home, the Estate Agency Affairs Board
requires that the agent must provide the seller
with a marketing plan specifying exactly how
the property will be marketed and which
services will be provided. In return for the estate
agent’s commission, you will get an extensive
marketing campaign for your propert y.
Professional photos will be taken and posted on
the realtor’s website and adverts will be placed
in various newspapers, property websites and
magazines, which does carry a cost. How well
your home is displayed and marketed has a
huge impact on when and for how much your
home sells for. With the advent of the Internet
and new platforms and technology, selling
your home or buying a new one has evolved
from the process of a for sale sign outside your

The average repayment term is 20 years,
however the repayment term can go up to
30 years.

How much does this amounts to, what
interest are you likely to pay?
For a R1 million bond paid over 20 years at
8.5% interest, you will pay R2,082,775 by the
end of the term (interest portion is R1,082,775).
Banks are calculating interest based on a variety
of factors and each transaction is individually
priced but it is important that homebuyers
realise that current interest rates offered
are mostly positioned above the prevailing
prime rate rather than below it so prime plus
rate offerings are more common now and
concessions below prime was the norm in years
gone by.

The legal jargon that is used and what
it means
When you buy a property, the property is
purchased “voetstoots” or as is. This means that
any patent defects (visible problems) and latent
defects (problems you can’t see) ar ??????????e?)????????L????????????????????????????)??????????????????????????????????????)????????????????????????????????????)??????????)!??????????????????????????????)??????Q??????????????????????????)??????????????((0