The real cost of property: What buyers miss

• The purchase price is only the starting point, total acquisition costs can add 8% to 10% in cash upfront
• Transfer duty, legal fees and bond costs catch unprepared buyers off guard and can delay or derail transactions
• Smart buyers plan ahead using affordability tools and pre-approval to avoid financial strain from day one

The price is just the beginning

For most South Africans, signing an offer to purchase is the biggest financial decision they will ever make. Yet many buyers focus almost entirely on the purchase price, without fully understanding the true cost of getting the keys.

The reality? The gap between the listed price and the actual cost of acquiring a property is often far wider than expected.

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According to Bradd Bendall, this is one of the most common mistakes buyers make: “Affordability is about far more than the monthly repayment. The full cost of acquiring a home can exceed the purchase price by 8% to 10%.”

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On a R2 million property, that’s an additional R160,000 to R200,000 in cash, a figure many buyers simply haven’t planned for.

Even with the rise of 100% home loans, which remove the need for a deposit, the upfront costs don’t disappear. They remain the buyer’s responsibility and they can derail deals if not properly accounted for. 

The hidden cost layers buyers must understand‍

Beyond the purchase price, there are three major cost pillars that every buyer must budget for, each with its own implications. 

1. Affordability: More than just the monthly bond
Affordability is often misunderstood. Banks assess whether you can service a loan, but that doesn’t mean you can afford the full cost of ownership.

Key realities:

• Monthly repayments are only one part of the equation
• Buyers must fund upfront costs in cash
• Ongoing costs (insurance, levies, maintenance) add pressure

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Bendall is clear: Pre-approval should be used strategically, not as a green light to spend to the limit. “A pre-approval gives you a ceiling. The smart move is to subtract all upfront costs before deciding your price range.”

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Data from BetterBond shows that 95% of pre-approved clients secure a bond, largely because they are financially prepared upfront.

2. Transfer Duty and Transfer Costs: Not the same thing
This is one of the biggest areas of confusion.

Transfer Duty (Tax)

• Paid to SARS
• Applies to properties above R1.21 million (as of April 2025)
• Calculated on a sliding scale (up to 13% for high-value properties)

Transfer Costs (Legal Fees)

• Paid to the conveyancing attorney
• Based on tariffs guided by the Legal Practice Council
• Payable even though the attorney represents the seller

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Bendall clarifies the distinction: “Transfer duty is a tax. Transfer costs are professional fees and both must be budgeted for separately.”

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3. Bond registration, conveyancing and legal fees
This is where many buyers are caught off guard. There are two separate legal processes: 

• Transfer of ownership (handled by a conveyancer)
• Registration of the home loan (handled by a bond attorney)

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Each comes with its own cost. “Buyers are often surprised to receive two legal accounts. These are separate professionals, and both must be paid before registration,” says Bendall. 

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Additional costs include:

• Deeds Office fees
• Rates clearance certificates
• Admin and disbursement charges

These smaller items can still add thousands of rands to the total bill.

Sectional Title Schemes: Another layer of costs‍

In sectional title properties, the cost structure becomes even more complex. According to Zerlinda van der Merwe of TVDM Consultants: 

• Buyers may need to pay pro-rata levies before registration
• Ongoing levies become a fixed monthly cost
• Special levies or maintenance projects can arise

These are not optional extras, they are part of the real cost of ownership and must be factored in upfront.

Use an ‘Affordability Calculator’ before you buy‍

The smartest buyers don’t start with property listings, they start with numbers. Using an affordability calculator (such as those from BetterBond) allows buyers to: 

• Model different price points
• Factor in upfront costs
• Stress-test affordability against interest rate changes

This approach ensures:

• Realistic budgeting
• Cash flow resilience
• Better long-term decision-making

Plan for reality, not just the price‍

The South African property market offers opportunity, but only for those who understand the full financial picture. The purchase price is just the entry point.

The real cost includes:

• Upfront transactional expenses
• Ongoing ownership costs
• Financial buffers for uncertainty

Buyers who ignore these realities risk:

• Delayed transfers
• Financial strain
• Failed transactions

Those who prepare properly, however, position themselves for success. The way forward is simple:

• Know your numbers before you shop
• Build in a buffer
• Focus on affordability, not just approval

Because in today’s market, financial clarity isn’t optional, it’s the difference between securing a home and losing the deal.

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