Buying your first home? Watch out for these hidden costs

702's Gugs Mhlungu spoke to resident certified financial advisor, Paul Roelofse.

Listen to their conversation in the audio clip below.

From transfer duties to attorney fees, the hidden costs beyond a home's listing price often catch first-time home buyers off guard.

"... especially if it's a first home buyer, you know, we get very excited about having our first house. We save, perhaps, we do our homework in terms of where we want to live and we eventually get to this commitment stage. We say right, that house is what we want. We work out what we think we can afford, we lay it down with the offer to purchase and there are all sorts of hidden surprises that come after that, which are not really known. They're not really that obvious to us and they only come out right at the end of the transaction..."

- Paul Roelofse, certified financial advisor

Roelofse explains that while most buyers prepare for deposits and monthly repayments, things such as double legal fees, bond registration, and SARS duties often come as unwelcome surprises.

One of the biggest misconceptions, Roelofse says, is the assumption that buyers only pay one set of lawyers.

In reality, separate legal fees are owed to the seller’s attorney and the bank’s attorney, which can run well over R15,000. 

He adds that additional costs like transfer duties, deeds office fees, and property valuation assessments can push the bill much higher - sometimes up to R25,000 just to register the bond. 

Roelofse shares some of the common hidden costs:

• Double legal fees – one for the seller’s attorney and another for the bank’s attorney.
• Bond registration costs – including admin fees, postages, deeds office charges, and more.
• Transfer duties – payable to SARS, starting at 3% above R1 million and climbing up to 8%.
• Property valuation fees – charged by the bank before approving a bond.
• VAT on professional services – many legal and admin costs include VAT, further raising the total.

"So the receiver gets quite a nice slice out of the transaction along the way."

 - Paul Roelofse, certified financial advisor

Roelofse also urged homeowners to avoid lumping home insurance premiums into their bond repayments, as this leads to unnecessary interest payments. 

Instead, he advises setting up a debit order directly. And even when the bond is paid off, transferring the title deeds to your name can still cost upwards of R7,000. 

"...there's a whole bunch of other things which can't be really planned for...the layperson, even when you get those bills, just doesn't quite understand them. We just simply accept them as part of the process...we can try and understand them as much as we can, but when you start getting into the very very nitty-gritty of it, you have to be something short of a technical expert to really understand it."

 - Paul Roelofse, certified financial advisor

Scroll up to listen to the full conversation