Rawson Finance, the in-house bond origination division of the Rawson Property Group, has launched a new, totally free, bond repayment and cost calculation service which will enable almost anyone, no matter how unfamiliar they are with home purchase transactions, to estimate accurately the extra costs involved in the purchase of a home.
The new service, said Mike van Alphen, National Manager of Rawson Finance, can be accessed via the Rawson website at www.rawson.co.za/transfer-cost-calculator.
“While we at Rawson Finance will always be willing to assist and guide potential home buyers in their search for bond finance, we expect this do-it-yourself service to speed up and clarify the initial stages in bond and house hunting,” said van Alphen.
The uncomfortable truth, he added, is that a great many would-be home buyers are ignorant about the ancillary costs that accompany any home purchase.
“About 30% of those who come to us for help to get a bond are totally unaware of the extra costs that will inevitably be incurred and another 20%, although they know about these, have probably got inaccurate ideas as to how much they will amount to. As a result, all too often such people who have not consulted with us originally have to lower their sights and ambitions and buy in a less expensive bracket than they originally planned for.”
The ignorance or misinformation of such people, said van Alphen, is wholly understandable because so many extra costs are involved in any home purchase.
Taking as a typical example a R1,6 million apartment bought recently with a R1,3 million bond, van Alphen listed the upfront costs as:
· A R300,000 deposit
· R45,000 in transfer duties
· A R900 Deeds Office fee
· R18,030 in conveyancing fees
· Posts and petties of R950
· A R175 electronic facilitator fee
· A R140 Deeds Office search fee
· R2,701 VAT payable on the above costs (not including the deposit)
That is by no means the end of the story because there will also be attorney costs related to the registration of the bond. In the transaction mentioned, these will be:
· R14,930 in attorney’s fees (bearing in mind that in most cases a second attorney will be employed for the bond, i.e. not the same attorney that handled the transfer).
· R900 Deeds Office Fee
· R950 for post and petties.
· A R305 electronic facilitation fee.
· A R140 Deeds Office search fee.
· Vat of R2,286 on the above charges.
So over and above the deposit, an additional R87,407 is required for transfer and bond costs.
Last year, said van Alphen, most bond originators saw respectable increases in their turnover. This, he said, shows how much the public appreciate the bond origination service, particularly the fact that a good bond originator can get quotes from as many as seven banks or lending institutions.
“While it is true,” added van Alphen, “that housing loans are increasingly difficult to come by and in general the debt situation is certainly not getting any easier, it has to be recognised that South African banks, stung by the bad debts of the last downturn, now have a duty to their shareholders to avoid this happening again.”
Although as yet there is very little evidence of a significant upturn in the number of bigger bonds being issued, he said, Absa and FNB figures indicate that South Africa’s larger and more expensive homes are once again beginning to attract buyers, who, it is hoped, will be applying for big bonds. Right now, said van Alphen, most bond originators are finding that the bulk of the action in bond issuing is still below the R1,5 million level and here the demand is likely to remain very strong throughout the year ahead.
For further information contact Mike van Alphen on (021) 658 7100.
