Check it; it makes cheque-book sense

Private Property South Africa
Martin Hatchuel

You probably wouldn’t buy a used car without having it checked professionally – but as many as 99% of buyers of used homes sold in South Africa buy without professional advice about the physical condition of the buildings.

“Although it’s the appearance of a home that buyers often fall in love with, there is sometimes more to a home than meets the eye,” said Adrian Goslett, CEO of RE/MAX of Southern Africa.

“Purchasing a property is a large investment. In fact, for many it’s the largest financial investment they will ever make. For this reason it is important that buyers take their time and give their decision the necessary consideration that it requires.

“While aesthetic appeal will play a role in the decision, other more crucial elements need to be considered – such as the structural components of the property.”

Costly structural “fixes”

“Rectifying severe structural defects will be a costly affair that impacts on the home’s potential return on investment,” he said.

According to HouseCheck Property Inspections director, John Graham, buyers of “used” homes in South Africa have very little recourse under the Consumer Protection Act (the CPA).

“The CPA makes it illegal for businesses to sell goods voetstoots (‘as is’ or without guarantees) - but it also makes it clear that this does not apply to private sellers who don’t make their living out of selling items like the one in question,” he said.

“And there’s a second anomaly in the CPA: it doesn’t apply to intermediaries that are already governed by other national legislation - like estate agents, which are governed by the Estate Agency Affairs Board (which is a statutory organisation).”

This means that if you’re buying a home, you could have no protection - and, according to John, “Most houses sold in South Africa are sold second hand.”

Disclosure

John said that the Estate Agency Affairs Board does indeed urge both agents and sellers to make as many disclosures as possible - but his advice to buyers is to base their offers on proper inspections which have been made by trained, experienced professionals.

The estate agent might not explain the voetstoots clause properly to the buyer; the seller might not know everything about his or her own houses - there could be any number of reasons why a buyer could go into the purchase of a home without all the information he or she needs.

“Our advice is to make your offer to purchase based on the outcomes of a satisfactory home inspection,” said John.

And, when you consider that you might be spending millions on your purchase - and that you might find that you suddenly need to spend tens or even hundreds of thousands more soon after you take occupation - spending a few thousand rand on a professional inspection seems like a no-brainer. (John points out that in the USA, 8 out of 10 buyers employ the services of companies such as his when considering the purchase of a new home.)

Report

When you order a report, HouseCheck make its inspection at a time to suit the seller - and will deliver its results to you within one working day (a significant advantage in property transactions, which are often subject to fast deadlines).

Interestingly, HouseCheck retains ownership of its reports - and for good reason, too.

“We believe in transparency, honesty, and openness in property transactions, and in the principle of the honest broker, so we deliver a copy of each report to the estate agent involved, which puts him or her in the best position to advise the client - perhaps to renegotiate the offer, or even to withdraw altogether.

“Also, once the seller is in possession of the information we’ve uncovered, he or she is obliged in common law to disclose any defects we’ve found to other potential buyers - which means that everyone benefits in the end.”

And, as Adrian said, “Taking the time to ensure that the property is in good repair may require some initial work on the buyer’s part, however the time and effort will pay off in the long run by providing the buyer with an appreciating asset that grows in value.”

  • To see a sample report from HouseCheck, go here; and download the company’s “SA Home buyer’s guide” here (pdf, 1.6 mb).

Looking for a new tenant?

Advertise your property to rent FOR FREE quickly and easily on our website.

Find out more

Share:

Found this content useful?

Get the best of Private Property's latest news and advice delivered straight to your inbox each week

Related Articles

Clauses to protect seller and buyer
Many people do not realize that the protection provided to home buyers by the Consumer Protection Act (CPA) specifically excludes sellers who do not sell homes “in the normal course of business”. Because most “second hand” ...
The Downside of the Voetstoots Clause
Sellers often assume that it means that the property is sold as is, and that buyers have no recourse if problems are found after the sale has gone through. This is not strictly true.
Consumer Protection Act doesn't safeguard the interests of buyers
Purchasers of second hand houses have been surprised to learn that the Consumer Protection Act does not offer them any protection against estate agents and the sellers of these houses - a fact that must cause investors to pause ...
;