A lot of homeowners in South Africa put their houses up for sale without considering the significant costs involved, both prior to and following the property’s sale. If you’re on the brink of listing your house, you should be aware that, on average, the expenses related to selling a house in South Africa can accumulate to over a hundred thousand.
This is a significant amount to consider, especially when you understand that the entire process of selling a property and officially transferring ownership at the Deeds Office can take up to three months or even longer. And during this period, you won’t have access to the money from the property sale.
If you can’t afford to cover expenses like compliance certificates, outstanding municipal bills, and transfer and registration fees, bridging finance can help you “bridge” this financial gap.
What Is Bridging Finance and How Does It Work in Real Estate?
Suppose you’re in the market for a new property, and you’ve already committed to the sale of your old home by signing the Offer to Purchase with the buyer. Additionally, you’ve finalised a purchase agreement for your new residence.
The issue at hand is that, to secure your new home, you need to make a deposit. Unless you have a substantial amount of money saved up, you likely rely on the sale of your current home for this deposit. However, it can take up to three months for these proceeds to come through – assuming everything goes smoothly.
That’s where the need to apply for bridging finance comes in, providing you with immediate access to cash flow and effectively “bridging the gap” between the sale of your old home and the purchase of your new property.
Simply put, bridging finance is a short-term financial solution that enables you to effortlessly transition from your current property to the new one without being hindered by the timing mismatch between these two property transactions. It helps you avoid financial stress and keeps your property plans on track.
A Closer Look at the Costs Associated with Selling Your Property in South Africa
Bridging finance provides you with quick access to the necessary funds to cover the following costs:
- Bond cancellation: When selling, you may encounter bond cancellation costs, which are managed by the bank’s appointed attorney. These costs include bond cancellation fees, bond initiation fees, and pro-rata interest.
- Rates, taxes, and levies: Sellers are responsible for paying rates, taxes, and levies up until the property’s registration date.
- Compliance certificates: You’ll need to obtain certificates for electrical, plumbing, and beetle inspections. These certificates typically range from R500 to R1 000 each, and potentially more if issues are uncovered during inspections.
- Repairs and maintenance: Preparing your property for sale may require investment in repairs and maintenance to make it more appealing to potential buyers.
- Moving costs: Moving costs include expenses related to packing, hiring a moving company, transportation, and potentially temporary accommodation if your new property is not immediately available.
As mentioned earlier, the average total expenses of selling a house in South Africa can add up to more than R150,000. Without an appropriate financing solution like bridging finance, you may find these expenses overwhelming and potentially disruptive to the property sale process. Bridging finance can provide the needed financial support to manage these costs effectively and ensure a successful sale.
Taurus Property Bridging – A Financial Lifeline for Sellers Like You
At Taurus Capital, we understand that selling a property can be emotionally, physically, and financially taxing. And it’s incredibly frustrating to know that your money is tied up in a property that you can’t access immediately.
Typically, it takes 1 to 3 months for a property sale to be officially completed, adding more stress to an already demanding situation. That’s where our solution, Taurus Property Bridging, comes in. We offer financial assistance to property sellers who need flexibility while waiting for the sale to be finalised.
With Taurus Property Bridging, you can receive an upfront payment of up to 80% of your sale proceeds while the registration process is underway. Our financing is straightforward and quick, usually processed within 24 hours. To date, we’ve assisted almost 1,000 property sellers, advancing a total of almost R200 million!
How Does Our Sellers Cash Advance Work?
The process is simple:
1. When you apply and get approved, we provide you with an upfront cash advance. The amount you can get is calculated from the total amount you’ll receive from selling the property, minus bond cancellation costs, your agent’s commission, etc.
2. You don’t have to make regular payments like you would with a loan.
3. When your property sale is officially registered, your attorney will settle the final balance. The reimbursement of the cash advance is deducted from the sale proceeds, with the repayment amount comprising the initial cash advance sum along with the flat rate fee.
4. We assign a dedicated consultant to answer your questions and guide you through the process, ensuring you make the right choice.
5. We keep it simple with a flat rate. No hidden fees, and no complicated interest calculations.
The Bottom Line
Bridging finance is a great way to help you transition from your old home to a new one without the worry of a long waiting period between sales. Taurus Property Bridging is your solution to bridge this gap and relieve the stress that often comes with property transfers.
With us, you can access the funds you need precisely when you need them. Feel free to reach out to our expert team at Taurus Capital if you have any more burning questions.
