Hidden cost warning for South Africans selling their homes

South Africans who want to sell their homes should plan carefully and understand hidden costs to avoid regrets and maximise value.

Just Property CEO Paul Stevens said that too many homeowners rush to sell their property, misread the market or undervalue unseen costs, only to look back with frustration.

Timing a sale right is rarely about chasing a single “peak price”. It’s about combining clear market signals with your personal goals so you leave the transfer office with maximum profit and zero second‑guessing.

Deciding whether it is a good time to sell depends on where the seller is, what they’re selling, and how prepared they are.

Some segments are seeing traction, especially well-priced homes in the Eastern and Western Cape. However, it is still a buyer’s market in many areas, and timing alone won’t guarantee profit.

According to FNB’s April 2025 Property Barometer, the national House Price Index recorded 2.2% year-on-year growth in April, its highest level in nearly two years.

Mortgage appetite is firming, and BetterBond’s April 2025 report shows home loan applications rose 9.3% year-on-year in Q1 2025. Notably, first-time buyer deposits eased by nearly 9%, and the national approval rate reached 77.5%.

At the same time, on 29 May 2025, the South African Reserve Bank cut the repo rate by 25 basis points, bringing it to 7.25%. The prime lending rate is now at 10.75%.

“This marks the first rate cut in nearly two years and has improved affordability for many buyers. Economists expect at least one more cut in the coming months, provided inflation continues to ease,” Stevens said.

Crucially, stock levels remain low in popular family suburbs after two years of undersupply, Stevens added. That imbalance is nudging realistic, well‑presented listings towards full‑price offers within weeks.

“If you have held off because prices seemed stagnant, the early‑stage recovery now provides a window to capture growing buyer confidence before new‑build supply returns,” he said.

However, “good” is never universal. Macro‑tailwinds make conditions favourable, but micro‑data – your suburb’s stock curve, your property’s condition and your personal timeline – ultimately decide whether selling today or six months from now will yield the best outcome.

Price and timing

Stevens explained that although national averages hint at recovery, they can hide what’s really happening in specific neighbourhoods or streets.

The FNB index may be rising, but certain coastal hotspots are already posting 3% growth while some inland townships remain flat. Rising expiries or successive price reductions signal cooling sentiment.

A shrinking supply of comparable homes combined with shorter listing periods usually precede price gains, he noted.

“Conversely, an uptick in houses that ‘sit’ for months with for sale signs on their walls or price reductions warns that momentum is stalling,” Stevens said.

Stevens urged homeowners using a real estate agent to ask for a data pack covering the past six months in their street or area node. This will reveal whether buyers are still competing or have begun negotiating harder.

Price is only one part of the equation when selling a home. Property owners may be relocating for work, freeing funds for another investment, upgrading to a bigger property or downscaling to reduce maintenance.

“Define your ‘why’ before you decide ‘when’. If liquidity is critical – for example, settling your kids’ university fees or financing a new build – the certainty of today’s offer may outweigh the hope of a marginally higher price next year,” Stevens said.

“On the other hand, if you have flexibility and an appreciating suburb, waiting through one more seasonal upswing could add meaningful value.”

Stevens said stock shortages occur in autumn and early winter because families tend to avoid mid‑year moves, which means listing in this window can attract premium offers.

Hidden costs

Stevens also stressed the importance of considering the expenses associated with selling a home, which people often underestimate.

“Bond cancellation penalties, compliance certificates, minor repairs and staging your property to look its best all add up,” he said.

“Banks typically require 90 days’ notice for bond cancellation. If no notice is given, they may charge an early termination penalty, often around three months’ interest. This can apply regardless of how far into the loan term you are.”

“While bond registration and occupation dates don’t always align, planning your timeline carefully can help avoid overlapping costs like interim rent or double utility charges, especially in high-value transactions.”

According to Stevens, capital gains tax is another tripwire when selling property. Typically, the first R2 million profit on a primary residence is exempt.

However, owners of secondary properties, including short-term rentals, holiday homes, and inherited homes, face inclusion rates that can erode their profit margins.

“Timing a sale in a tax year when you have lower other income or staggering disposals across years can soften the blow,” he said.

“It would be wise to book a pre‑sale tax consultation with your accountant or financial advisor, who will be able to help you structure your exit efficiently.”

Stevens cautioned that waiting for “one more uptick” before selling a home becomes dangerous when external forces shift.

“Rising interest rates, levy increases, or zoning changes can chill demand faster than sellers can adjust their expectations.”

“Even in a rising market, the cost of a delay will compound, particularly if you’ve already bought, as a vacant investment property will still incur rates, insurance and security charges every month.”

He added that running the numbers is crucial if the home being sold requires significant maintenance, such as a roof replacement or compliance upgrades.

“Spending R200,000 to chase an additional R150,000 in price creates negative equity. Do essential fixes for compliance purposes, but weigh cosmetic upgrades against likely buyer discounts so you invest only where the return is clear,” he said.