Many homeowners in South Africa find themselves in a tight spot when contemplating selling their houses due to the considerable expenses involved, which can exceed R150,000 on average.
The process of selling and transferring property ownership through the Deeds Office often takes several months, leaving sellers without access to the proceeds during this period.
Instead of providing relief, these high costs can exacerbate financial strain, adding stress to an already challenging situation.
Elad Smadja, who heads property bridging finance at Taurus Capital, offers a solution. Smadja said that bridging finance addresses the immediate cash flow needs of sellers by providing them with a cash advance when required.
Various expenses kickstart the property sale process, including rates clearance certificates, outstanding levies, bond and legal fees. Additionally, if sellers are purchasing another property, they'll need funds for a deposit and moving expenses.
Typically, it takes around three months for a property sale to finalize, further prolonging the stress of an already taxing situation. Being unable to access the proceeds while waiting only compounds the frustration.
Taurus Property Bridging offers sellers an upfront payment of up to 80% of the sale proceeds during the registration process, processed within 24 hours," said Smadja.
This isn't a conventional loan. Upon approval, sellers receive an upfront cash advance calculated from the total sale proceeds, minus bond cancellation costs and agent commissions.
Unlike regular loans, there are no periodic payments; instead, the final balance is settled by the attorney once the property sale is registered.
The cash advance, along with a discounting charge, is deducted from the sale proceeds. This fixed charge prevents the accumulation of compound interest if there are delays, unlike standard loans.
The application is based on the property, not the seller's credit score.
Considerations when selling your home include:
Bond Cancellation: Fees managed by the bank's attorney include cancellation fees and pro-rata interest.
Rates, Taxes, and Levies: Sellers must cover these costs until the property's registration date.
Compliance Certificates: Electrical, plumbing, and beetle inspection certificates are necessary, with potential additional costs for repairs.
Repairs and Maintenance: Investments may be required to enhance the property's appeal to buyers.
Moving Costs: Expenses related to packing, moving services, storage, transportation, and temporary accommodation if needed.
Personal Debt: Consider any outstanding obligations such as school fees or credit card payments.
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