Inspect the house before you buy it

2012-03-03 09:32

Home inspections in South Africa are still the exception rather than the norm, yet it can be a very powerful marketing tool for a seller and provides a buyer with peace of mind.

In the US, three out of four houses are inspected by professional home inspectors prior to transfer and in many states this is a legal requirement. In the UK, home inspections are also a requirement.

A home inspection is carried out by a certified engineer who checks the house for any structural defects or major repairs.

Even if the house does not have a structural defect that would cause the sale to fall through, as a buyer, you have some idea of what costs you are likely to incur in your first few years as you don’t want any nasty surprises.

As a seller, you are able to strengthen your property’s prospects by providing a home inspection.
This can make your property more attractive to a buyer, which is important in this weak property market.


Why is inspection important?
In theory, the Consumer Protection Act has made it fairly simple for an aggrieved home buyer to take complaints to the consumer protection commissioner – for free. Previously, home buyers would have to find money for expensive legal action to pursue a claim against a seller or estate agent.

However, because the act only covers developers, property investors and estate agents – and not private sellers of homes – protection under the act is limited for buyers who are purchasing from private sellers.

Exactly how the consumer protection commission is able to act as “policeman” in the property world remains to be seen.

Theoretically, in terms of the act, the aggrieved buyer can insist on restitution either by way of “repair” or by way of “return and refund”.

But how do you unwind a property transfer that has gone through the deeds office and that has been funded by a new mortgage bond loan granted to the buyer?

No one really knows the answer and it seems that the underfunded consumer protection commission is waiting for case law to be established to determine the extent of the act’s reach into the property industry.

This uncertainty makes it all the more important that buyers protect themselves proactively by commissioning an independent home inspection report before committing to the purchase of a new house.

So the rules of the game have changed because the estate agent (and in some cases the seller) must now make full disclosure to the buyer.

The problem here is that if the buyer hasn’t climbed up into the roof or checked structural problems like damp, he or she could face problems.

This is why a professional home inspection report is a good idea: the inspector will uncover potential problems that you can’t.

Typically, the inspector will inspect and document all observable defects from the top of the roof to the boundary walls and everything in between – including the roof cavity, walls, foundations, finishes, and electrical and plumbing installations.

The cost of a home inspection

A major inspection – looking at roof, walls, geyser, slabs, foundations, windows, drainage, boundary walls and more – could cost about R2 250.

Again, this depends on the size of property and what needs to be checked. Some companies charge per room, others per square metre, so check with a company first.

John Graham, chief executive of HouseCheck, says that the average inspection fee in the industry for a three-bedroom, two-bathroom house is R3 500, excluding VAT.

In most cases, this is less than 0.1% of the price of the house.

Obviously, different kinds of inspection will cost more or less, depending on the job. Different companies offer different packages and you will need to get quotes to see what you can afford.

A full house inspection, including due diligence and all mandatory inspections, could cost in the region of R6 000, depending on the size of the property.

Graham says badly installed or faulty hot-water geysers are easily the most common problem his inspectors encounter when doing home inspections.

Ideally, your geyser’s thermostat should be set to 65°C or lower to prolong the life of your geyser.

Homeowner’s insurance taken out by the buyer does not really apply as it does not cover wear and tear or pre-existing conditions.

There is a move under way in South Africa to launch a home warranty insurance product, which would operate in tandem with the home inspection report.

In other words, it would offer cover for defects not identified in the home inspection report. Such home warranty insurance is big business in the US.

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