Many defects aren’t obvious even to agents and experienced buyers

Private Property South Africa
John Graham

HouseCheck recently did a home inspection for an engineer who was looking to buy a house. This engineer told us that he was confident that the house was sound, but he was more concerned about the annoying little things, like a kitchen drawer that didn’t close smoothly an a toilet that didn’t flush properly.

Well, apart from a number of minor issues such as these, HouseCheck also found a few more serious concerns – defects that the engineer/buyer had not spotted during his several visits to the property.

One problem was fairly obvious to our inspector, who noticed immediately that the ceiling in one room was somewhat bowed. On checking the roof above, the HouseCheck inspector confirmed that the ceiling problem was a result of water damage from an unresolved box gutter problem on the roof above. A fresh coat of paint on the ceiling had successfully disguised this problem.

Some of the other defects were also serious and HouseCheck’s estimate of the cost of repairing all of the defects was around R35 000. Not a huge bill in the light of the purchase price of R1.6-million, but nevertheless quite a bit when the buyer doesn’t expect it and is already financially stretched with the house purchase.

What struck me was that this particular client was an engineer and thus more qualified than most home buyers and estate agents. He wasn’t expecting HouseCheck to find anything serious because he had already viewed the house and put in an offer.

This case illustrates why HouseCheck has a problem with the current practice of many estate agents of asking buyers to make a voetstoots offer without also advising the buyer to first ascertain the true condition of the property. In practice this can only be done by paying for an impartial and professional home inspection. HouseCheck believes that in order to protect buyers, estate agents should be routinely advising buyers to conduct home inspections.

Many estate agents, even those who occasionally recommend a home inspection, believe that they know enough about property to determine what is a “good house” and what isn’t. They choose which houses to recommend for inspections on that basis.

However, without a proper inspection of the roof covering and roof cavity for instance, the true condition of any house is seldom obvious. In this case study not even an engineer picked up some major problems and I doubt if the estate agent did.

HouseCheck has been criticised by some estate agents for stating that the established practice of asking buyers to sign voetstoots offers is the worst advice a buyer can get – unless the buyer is also counseled by the agent to get a home inspection report from an impartial professional. I acknowledge that a voetstoots clause provides necessary protection for sellers, but this clause is patently unfair for buyers unless the agent also advises the buyer to pay for a professional home inspection in order to be properly informed and understand what they are buying voetstoots.

I know it has long been standard practice in South Africa for estate agents to include the voetstoots clause in their agreement, but we have to ask ourselves: is this practice fair? Clearly it isn’t for the buyer – unless the buyer is advised by the agent on the implications of the voetstoots clause and has been counseled to get a home inspection report before finalising the sale agreement.

Most buyers still trust estate agents to guide them through the process of buying a home and HouseCheck believes that estate agents need to honour that trust. HouseCheck has suggested that the best way for estate agents to provide balanced advice for both sellers and buyers is to include a default clause in the agency’s standard offer to purchase document.

The wording of this default clause should be along these lines: “This property is sold voetstoots but is subject to the buyer being satisfied with a home inspection report arranged for and paid for by the buyer within seven days of acceptance by the seller of the offer to purchase. Delete and initial if not applicable.”

I also have the experience, after five years of inspecting South African houses for buyers, to know that the majority of home inspections that HouseCheck conducts do not result in a lost deal for the estate agent. A few cause in a price adjustment negotiation, sometimes the seller and estate agent have to justify the asking price despite the defects, but the majority of inspection reports result in a relieved seller and agent who know there will be no unpleasant post-sale come-backs and peace of mind for the buyer who understands the actual condition of the property

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