Students find out what buying a home costs on top of the price (transfer duty from a sliding scale, attorney fees, Deeds Office fees: R114 400 on a R1 911 000 home), and practise negotiating with the game's Deal of the Day, where a buyer's offer sits below the asking price and the seller must decide whether to accept or counter.
For: Grade 12 Mathematical Literacy (Finance: percentages and costs from a table).
What students will be able to do
- Calculate a percentage difference between an offer and an asking price, and find the halfway price.
- Work out transfer duty from a sliding-scale table, and say why a home under the threshold pays none.
- Add up the costs of buying a home and say what share of the price they are.
- Weigh accepting an offer against a counter-offer by multiplying each price by its chance.
- Explain in plain words why the best call can change from day to day.
Before the lesson
- The Deal of the Day is the same for every player on a given day and changes at midnight (South African time). Open it once before the lesson to see today's deal.
- Print Worksheet 2 with its Print worksheet button below, one per student or pair, or show it on a screen.
- Each pair needs a phone, tablet or computer with a browser. No sign-up.
The lesson plan, minute by minute
- 5 min
What does a buyer pay besides the price?
Ask the class to list the costs of buying a home. Write them on the board. Keep the list to compare with part B of the worksheet.
- 10 min
Play today's Deal of the Day
Each student or pair opens the Deal of the Day link. The game shows a buyer's offer on the seller's home and asks for three calls: whether to accept, counter at halfway or hold at asking; whether to give the bank its notice now or wait; and whether the buyer may move in early on occupational rent. After the three calls the game may ask a bonus question, then shows Your calls: a coloured square for each call, the best call and what each call is worth on average. It takes one to three minutes. Because everyone has the same deal, the class can compare results. Students fill in part C.
- 20 min
Work through the worksheet
Students complete parts A and B. In part A they use the game's own odds to work out an expected price for each call. In part B they use the transfer duty table, which is the part most students find new.
- 10 min
Debrief
Compare the class's calls with the game's best call on the Your calls screen, then use the discussion prompt below.
Worksheet 2 and answer key
The worksheet fits one A4 page. The answer key opens below it and prints only when you press its own button.
Answer key for teachers: Worksheet 2: Buying costs and negotiating
Answer key, for teachers only
Answer key for worksheet 2: Buying costs and negotiating
Every answer is computed from the game's engine and the site's verified transfer duty, attorney and Deeds Office tables. Where a printed figure is rounded to the rand, the answer is worked from the printed figure.
2.1. R78 000 below asking, which is 4% of the asking price.
- R1 950 000 less R1 872 000 = R78 000.
- R78 000 / R1 950 000 = 4%.
2.2. R1 911 000.
- (R1 872 000 + R1 950 000) / 2 = R1 911 000.
2.3. Accept the offer: R1 872 000. Counter at halfway: R1 878 646. Hold at asking: R1 860 113. The highest is "Counter at halfway", R6 646 more than accepting.
- Counter at halfway: 0.66 x R1 911 000 + 0.34 x R1 815 840 = R1 878 646.
- Hold at asking: 0.33 x R1 950 000 + 0.67 x R1 815 840 = R1 860 113.
- Accepting is certain: R1 872 000.
- The gap is small, and it is before holding costs: while the home stays unsold the seller still pays bond interest, rates and levies, and in the game that cost counts against a counter that fails. That is why the game's best call changes from day to day.
2.4. R28 446.
- R1 911 000 falls in the band R1 663 801 to R2 329 300: R13 614 plus 6% of the value above R1 663 800.
- R1 911 000 less R1 663 800 = R247 200.
- 6% of R247 200 = R14 832.
- R13 614 + R14 832 = R28 446.
2.5. R114 400, which is 6% of the price.
- R28 446 + R42 406 + R1 790 + R39 968 + R1 790 = R114 400.
- R114 400 / R1 911 000 = 6%.
- The bank initiation fee of R6 038 is added to the bond, so it is not paid in cash. The unrounded cash costs are R114 401; the gap is only rounding.
2.6. R305 500, which is 16% of the price.
- R191 100 + R114 400 = R305 500.
- R305 500 / R1 911 000 = 16%.
2.7. No transfer duty: R1 150 000 is below the R1 210 000 threshold. They still pay attorney and Deeds Office fees.
- The first band of the table is "None" up to R1 210 000.
- Transfer duty is only one of the costs. The transferring attorney, the Deeds Office and the bond registration all apply to a home of any price.
C. Marked against the game's own Your calls screen, which shows the best call and the numbers behind it at the end of the deal.
- The same call can end differently on different devices, because the game's dice decide whether a buyer says yes. That is the point of the odds.
The transfer attorney and bond attorney fees follow the Law Society's non-binding guideline of fees. Real quotes are often lower.
The odds, the second buyer's price and the deposit share are the game's own and are stated on the worksheet. They are teaching figures, not market statistics.
Discussion prompt
A counter at halfway can win R39 000 more than accepting, or lose the buyer. When is it worth the risk? What changes on a quiet day, when few buyers are looking?
Points to draw out
- On a quiet day the game lowers the chance a counter works. On a busy day it raises it. Students should say which way the best call moves.
- Holding costs matter: while the home is unsold, the seller still pays the bond, rates and levies.
- A cash buyer or an offer with no bond condition is stronger than one that depends on a bank approving a loan.
- The buyer's side is also negotiating: R305 500 in cash has to be found on top of the bond, so a buyer who stretches on price has less room for the costs.
- Negotiation is easier when both sides know the real costs. A transfer duty table and an attorney's quote are facts, not opinions.
Curriculum link
Practises CAPS skills in a property setting: percentage calculations (Grades 10 to 12) and calculating a cost from a given table (the CAPS tariff systems, Grades 10 to 12). Buying a house is one of the CAPS contexts for Grade 12.
Grades 10, 11 and 12 · Numbers and calculations with numbers, Percentages · page 34
Calculate a percentage of a value, decrease a value by a percentage, express a part as a percentage, and find a percentage increase or decrease.
Grades 10, 11 and 12 · Finance, Tariff systems · page 50
Calculate costs using a given tariff table or formula. The CAPS names municipal, telephone and transport tariffs and bank fees.
Grade 12 · Finance, scope of contexts · page 48
Contexts for Grade 12 include buying a car or a house.
Transfer duty is not one of the tariffs the CAPS names, so the sliding-scale question practises the same skill (reading a cost from a table with bands) on a different table. Weighing a decision by its probabilities (expected value) is beyond the CAPS Mathematical Literacy content and is offered as an extension.
Page numbers are those printed in the Curriculum and Assessment Policy Statement (CAPS), Mathematical Literacy, Grades 10 to 12, 2011 edition, as published at education.gov.za. This is our own mapping: Privately is not affiliated with the Department of Basic Education and this lesson is not endorsed by it. Check it against your province’s annual teaching plan. Curriculum notes and sources.
Extension
Students compare the Law Society's guideline fee for the transferring attorney with a real quote from an attorney's website, and explain why the two can differ.
Questions about this lesson
How much does buying a home cost on top of the price?
It depends on the price. In worksheet 2, a R1 911 000 home with a 10% deposit has R114 400 of costs paid in cash at transfer (R28 446 of it transfer duty, the rest attorney and Deeds Office fees), so the buyer needs R305 500 in cash. A home under R1 210 000 pays no transfer duty but still pays the other costs.
More free lesson plans
Counter That is an educational game with made-up homes, people and banks. The worksheets are teaching examples, not financial, legal or tax advice. No student data is collected: the privacy notes say what happens when a class plays.
