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  • Brent Crafford

ESTIMATED COSTS INVOLVED IN A INSTALLMENT DEED OF LAND SALE ("IDOLS")

The estimated costs (excl Vat) payable in respect of each IDOLS transaction including details of the party liable therefore are as follows:


1. On the basis that an agent introduces the parties, the Seller will be liable for Commission, payable upon recordal or endorsement of the title deed. The recommended commission to range between 3% to 7% of the purchase price.


2. The Seller will be liable for the costs of a COC and any other certificates that may be required ie. gas installation, electric fence, entomology certificates.


Variable cost to be negotiated by Seller with service provider


3. The Seller will be required to bring rates, levies and services up to date as at the date of possession and occupation by the Purchaser.


4. Negotiation, structuring and preparation of IDOLS OTP which includes:


i. Provide IDOLS OTP

ii. Affordability, credit check and applicability of NCA

iii. Deeds search

iv. Procuration of bond statement, rates, levies and special levies.

v. Ensuring that the purchase price and interest is correctly calculated over the term of the repayments and identification of the date of the final instalment.


Fixed cost - Purchaser R 3 900.00


5. Following conclusion of the IDOLS OTP:


i. Ensuring provision of COC by Seller

ii. Attend to payment or arrangements for payment of any outstanding rates, levies, services and transfer duty.

iii. Attend to payment of deposits, commission and costs.

iv. Ensuring that all parties are notified and provided with a copy of IDOLS OTP.

v. Ensuring that the mortgagee bank is notified and supplied with a copy of the IDOLS OTP and the original title deed requested for endorsement purposes.

vi. Ensuring that the purchaser is provided with a mortgage bond statement not older than 4 months from the date of sale.

vii. Ensure that possession and occupation occurs according to IDOLS OTP.


Fixed cost - Purchaser R 3 900.00


6. Endorsement of the title deed within 3 months from date of sale and return of original endorsed Title Deed to the mortgagee bank.


Variable cost - Purchaser approx. R 2 900.00


7. Ensure that the Seller provides Purchaser with annual statement of account and/or bond statements.


No charge for reminder inclusive of service unless Seller requires assistance in compiling statement for which fixed cost p.a. is charged


Fixed cost – Seller R 450.00


8. Estimated costs for the registration of the Seller as a credit provider on the basis of a capital value of transaction at R 1 million:


Variable Registration Cost – Seller R 4 500.00


Annual renewal cost – Seller R 3 500.00


On the basis of the Friend vs Sendal judgment of the High Court, the Seller is only required to register as a credit provider if it is in the business of providing credit and concludes more than 1 credit agreement.


9. Attend to transfer of property upon payment of final instalment, or prior thereto if the property is sold by Purchaser.


Variable cost as per tariff, payable by Purchaser on registration of transfer, by way of example transfer costs and duty on a purchase price of R 1 million:


Transfer duty (payable within 6 months by the purchaser) R 3 000.00


Deeds Office fee (payable on future registration of transfer) R 1 020.00


Transfer costs (payable on future registration of transfer) R 24 500.00 (ex Vat)


Transfer duty is payable by the Purchaser within 6 months of the date of the IDOLS OTP


10. In Summary:


The costs which a Seller may expect to pay includes commission, certificates and bringing rates, levies and services up to date.


The costs which a Purchaser may expect to pay for this process based on a purchase price of R 1 million amounts to approx.:


Initial costs: R 10 700.00 plus Vat R 1 605.00 plus Transfer Duty R 3 000.00 = R 15 305.00


Later costs on registration of transfer: R 28 520.00




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