Moving house may seem nothing short of a hassle, but in addition to the physical mission of packing and moving there are the costs that are much larger than you expect, excluding the price of your new property. Lanice Steward, MD of the Cape estate agency, Anne Porter Knight Frank says,
“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.”
Steward explained that if, hypothetically, the homeowner arranged to sell his current home at R1,5 million and move to a home valued at R2 million, the costs involved would be; 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 will therefore cost an additional R250 000 and this is without 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.
If you are planning on a move it is definitely worth your while to sit down and evaluate the costs that will be incurred with the moving process. This will stand you in good stead and prevent you from running into a ‘financial pickle’ as a result of these seemingly hidden costs.
