A large percentage of home buyers are new to the property market and novices when it comes to assessing the condition of their house.
Therefore a mandatory home inspection by an independent, qualified professional could be beneficial, and a simple consumer protection measure.
Such an inspection, not to be confused with the evaluation or appraisal made by the representative of a bank to assess whether the property has sufficient value to secure the mortgage, would have many advantages, says Berry Everitt, MD of the Chas Everitt International property group.
He says these include giving home buyers peace of mind that someone who knows what they are doing is checking the property from top to bottom, so that they are not going to end up having to make expensive repairs to correct hidden defects.
This, he says, would be especially useful for first-time buyers on a tight budget.
According to Everitt, a compulsory home inspection would also give home sellers the knowledge that they wouldn’t have to deal with any accusations of non-disclosure.
It would give the banks more security, in that it would, in large measure, remove buyer dissatisfaction with the condition of a property or problems with covering the high cost of repairing unforeseen or unknown defects, which are major causes of mortgage defaults.
A home inspection is beneficial to estate agents because it could prevent the problems that can easily arise from seller non-disclosure and buyers later discovering defects they feel the agent should have told them about.
Everitt says a home inspection as a prerequisite to the transfer of a property – on the same basis as the requirement for an electrical certificate of compliance, say, or a beetle certificate - would also have the advantage of being a preventative measure rather than the doubtful and notoriously hard to access curative options available in terms of the Consumer Protection Act or through the National Home Builders’ Registration Council (NHBRC).
In the case of newly-built homes, Everitt says, inspection by an independent professional would also prevent the problems arising from the fact that most municipalities currently have a serious shortage of qualified building inspectors – which would once again benefit the banks who grant building loans.
As for the cost of having a home inspection done, he acknowledges that there is bound to be some argument about who should carry this. “House inspections currently usually cost between R3 500 and R6 000, which is not affordable for most first-time buyers, especially if they are struggling to put together a cash deposit in order to secure a home loan.
Similarly, he says, it is unlikely that a property owner who is selling because of financial distress will be able to pay this.
“But there are other options. What about the banks being willing to add the cost of inspection to a home loan, for example, the way they sometimes allow transfer duty and bond registration costs to be included? Perhaps the NHBRC could use some of the millions of Rands worth of levies paid by registered builders to pay for home inspections on behalf of buyers who only use those registered builders? Or perhaps the government should fund a home inspection for anyone who is the recipient of a State housing loan or subsidy?”
Everitt says there are sure to be other solutions too, but whatever is decided, it needs to be implemented fast and efficiently to improve consumer confidence in the property market and help boost homeownership.
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