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Selling property may seem like a straightforward way to cash in on your investment but if you're not careful, hidden costs can eat into your profits and leave you with less than expected. From legal fees to unexpected taxes, failing to prepare for these expenses can disrupt your plans and impact your return on investment.
The Myth of “Profit = Selling Price – Purchase Price”
Most sellers believe they’ll simply pocket the difference between what they paid and what they sell for. However, actual profit is often much lower once all selling-related expenses are factored in.
1. Legal and Conveyancing Fees
In Zimbabwe and many other markets, property sales must go through a registered conveyancer. These professionals:
- Draft sale agreements
- Perform due diligence on title deeds
- Facilitate the transfer process
Average cost: Legal fees typically range between 3% to 5% of the property’s sale price, depending on the transaction complexity.
2. Capital Gains Tax (CGT)
If your property has appreciated in value, you may be liable to pay Capital Gains Tax (CGT). This tax is charged on the profit made from the sale of real estate.
Zimbabwe CGT rate (2024):
- 5% for individuals (with certain exemptions for primary residences)
- 20% for companies
Failure to account for CGT can delay property transfers or even void agreements.
3. Repairs and Home Staging
To attract buyers or achieve your asking price, you may need to spend on:
- Repairs (leaks, paint, structural issues)
- Cosmetic upgrades
- Cleaning and landscaping
- Professional staging or photography
Stat: Homes that are professionally staged sell 33% faster and for up to 6% more, according to global real estate trends (NAR, 2023).
4. Compliance Certificates and Documentation
To close a deal, you might need to present:
- ZESA (electricity) clearance
- City council rates clearance
- Property valuation report
- Building permits or approved plans
These can incur unexpected administrative costs and delay the process if not handled early.
5. Agent Commissions
If you hire a real estate agent, expect to pay commission fees typically:
- 3% to 7% of the final sale price
- Some agents may charge VAT on top
This fee is often negotiated, but it still needs to be budgeted for.
6. Bond Cancellation or Transfer Fees (If Applicable)
If your property is mortgaged:
- You'll pay bond cancellation fees
- May also incur penalty interest if you settle early
- Transferring a bond to a buyer also incurs fees
Consult with your bank early to estimate these costs.
7. Moving Costs
Don’t forget the logistics of moving hiring trucks, temporary storage, or cleaning services can add up quickly, especially if relocating across cities or provinces.
Pro Tips: How to Sell Smart
- Get a pre-sale cost breakdown from a lawyer or estate agent
- Work with a qualified conveyancer to avoid compliance delays
- Keep all your paperwork up-to-date
- Factor in tax when setting your asking price
Final Thoughts
Selling a property is not just about the final price it’s about what you get to keep. Knowing and preparing for hidden costs ensures you walk away with a fair return and no unpleasant surprises.
Don't let your profits vanish. Plan ahead, price wisely, and sell smart.
