Seller Tricks

10 Most Common Seller Tricks

 

sellers tricks and issues
The photo was taken of one of the seller tricks! Sellers try to hide issues under scatter mats!

Unfortunately, it can be difficult when unscrupulous sellers use tricks to hide defects. Here are the 10 most common seller tricks, and how you can recognise each one of the issues.

A home may be the biggest purchase you’ll ever make. So it makes sense to do everything possible to ensure you’re making a sound investment.

Painting over problem areas. 

Fresh paint itself is not a sign of dishonesty, but it can be used to cover water stains, mould and more. Many honest sellers use paint to update or freshen up walls. Take note if many areas were recently painted and mention that to the home inspector. You can also ask the seller for before-and-after photos.

Choosing to remain in the dark about potential problems are seller tricks. 

By law, a seller cannot be held liable for problems he or she didn’t know about. Thus, a seller trick is not to allow home inspections to be performed when it’s time to sell. Another seller trick is not to agree to a reasonable inspection contingency time period. Some will even tell potential buyers they don’t want to know what the home inspection reveals. This is all the more reason to get a thorough home inspectionIt’s a small price to pay to ensure you’re making a sound investment.

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Home Inspections Kill Deals

Four Reasons Why Home Inspections Kill Deals:

buyer inspection for houses

A buyer may cancel a transaction after a home inspection! It may be tempting to blame an overzealous home inspector when a transaction falls apart after the inspection of some houses.

But there’s more to that situation than meets the eye.

Estate professionals know there are many ways that deals can fall apart, from credit, financing, appraisals to plain cold feet. But certainly, one of the more common deal killers is the home inspection.

But it doesn’t have to be!

Houses and Home Inspectors Do Not Kill Deals

Four home inspection situations lead to a cancelled transaction. Two things which are not on this list are the house and the home inspector. Some estate agents blame the home or the home inspector. However, let’s consider what happens in these situations.

Problems are caused when the home inspection report significantly alters the buyer’s expectations about what they thought they were buying. The client may say, “Gee, I thought I was buying a well-maintained home, but now that we have looked closely, I see the house requires a lot more maintenance than we expected”.

Therefore, the cancellation has everything to do with the client’s expectations coming into the inspection! Agents may wish that the home inspector had been less forthcoming about the condition of the house but this is not the solution! The solution to this problem is buyers having more realistic expectations before they sign the contract. My website and blog attempt to teach people skills that will help them look at houses and evaluate risk so they are more prepared to make an offer on the right house.

Here are the top four reasons buyers cancel a deal after the inspection.

1) Unprepared buyers

There are no classes in university or high school to teach people how houses work or where the risk lies in a residential building. Even professional estate agents have little or no training to help them understand how to look at houses and identify issues. A new generation of homebuyers, many of whom who did not grow up working on their houses with their parents, compounds this problem.

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Home Inspection Contingencies

inspection contingency

Put a Home Inspection Contingency in Your “Offer to Purchase”

inspection contingency and sales price
Buying a house is not a game of Monopoly! Waiving the home inspection and inspection contingency may cost you much more than the cost of a home inspection!

Home Inspection Contingencies

If you don’t believe in having a home inspection you should realise that your investment is at risk.  In reality, a home inspection contingency is your only safeguard where the voetstoots clause forms part of the sales price and contract.

In South Africa, the voetstoots clause is part of the purchase contract in most of the property sales. But, unfortunately, you will not find any home inspection contingencies in any purchase contracts.

You may not consider that a home inspection contingency is a big deal! In that case, ask yourself why a seller will refuse to consider your offer that contains a home inspection contingency. It has occurred to some of my clients! I told them to consider it a lucky escape!  

In addition, a seller selling a house below market value most probably has serious defects. Don’t fall for reasons like the seller is leaving for overseas or retiring to the coast.

A home inspection contingency should be added as part of the purchase contract when you have a home inspection. It means you can cancel the sale or try to negotiate repairs based on the results of the inspection.

In most instances, you should negotiate for at least a week to conduct a home inspection. The time can be shortened or increased during offer negotiations.

An example of a home inspection contingency

“The Buyers’ offer is contingent upon a satisfactory inspection within  7 (or _____ ) working days. Upon receipt of the results of such inspection, the Buyers may request in writing at any time within the agreed period that the Sellers make certain repairs or that the Sellers reduce the sales price to compensate for such defect(s). Such a request to repair or reduce the price does not terminate the contract and the Sellers shall have _____ days from receipt of such request to agree to make such repairs or reduce the sales price. If the Sellers do not agree, the Buyers shall have _____ days to waive the contingency and accept the property “as-is” or to declare the contract null and void. “

The contingency expiry date

The minimum time period you should try and negotiate is 7 working days from acceptance of your offer. At a squeeze, 5 working days may be sufficient if there are no serious problems, but it puts a lot of pressure on everyone!

Setting the date that a home inspection contingency should be released depends on the contingency you negotiate with the seller. It may not automatically expire unless you take a specific action such as signing a contingency release. That is if a release is part of the contingency agreement. Therefore, if it expires before you have it inspected, you lose the right to have the home inspected.

When your sales contract has a home inspection contingency, it is important to conduct the inspection as soon as possible. I may recommend that you call a roofing contractor to do further investigation of a problem in the ceiling space. But, for example, you might have to contact several roofing contractors before finding someone available in the time frame you need.

Therefore, it is very important to keep the seller and agent in the picture of what is happening. Furthermore, you should advise the seller on your decision to continue or to negotiate a better sales price or whether you intend to withdraw from the purchase contract before the expiry date. If you don’t, you may have to honour the conditions of the sale.

Types of Home Inspections

A home inspection involves many components, which are primarily structural and visual. However, if I discover defects beyond my area of expertise, I will recommend that you consult an expert.

For example, if the home’s water pressure is low, I will recommend an inspection by a licensed plumber. There could be a blockage the water supply system, or the plumbing pipes could be corroded. I may not be able to identify such defects by noticing the low water pressure. If I recommend further inspections in the report, you may wish to call a specialist for advice.

This is also why an inspection contingency and the time period is so important! It gives you time for specialist inspections if they are required!

Specialist inspections may include any of the following:

  • Pest and termites
  • Serious structural cracks
  • Electrical wiring
  • Heating and air conditioning
  • Lead-based paint
  • Foundation and basement
  • Sewer or septic system
  • Soil stability
  • Trees and vegetation
  • Water systems and plumbing
  • Mould
  • Asbestos

Importantly, don’t forget to ask for the building plans and other important documents!

Disclaimer: This inspection contingency article is intended for educational purposes only and does not constitute legal advice. Real estate procedures and documents may vary. Consult a real estate professional or lawyer in your area if you have specific questions about this subject.

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THE HOME DETECTIVE » buyers home inspection

Walkthrough Inspections

walkthrough inspection

Walkthrough Inspections

walkthrough inspection without a written report

Walkthrough Inspections are comprehensive inspections without a written report. A Walkthrough Inspection is for clients who require the physical inspection but don’t need a report.

Furthermore, a Walkthrough Inspection fee is normally half that of a Comprehensive Inspection.

Usually, their reasons are one of the following:

  • Sometimes homebuyers don’t want or need a comprehensive inspection and report of the property they want to buy because they are on a tight budget.
  • Clients sometimes have shortlisted some of the homes they are interested in. All they require, at this point, is the walkthrough inspection’s assurance that there is not something seriously wrong with one or more of the shortlisted houses before committing to signing an “Offer to Purchase” and having a home inspection.
  • Because of circumstances, some buyers will need an inspection of a house they found on the internet. In this instance, they need is the assurance that the house they are interested in is worth the effort to inspect for themselves. Obviously, on these occasions, they are either too busy or have to travel some distance to view the house.
  • Other clients have done their own inspection of the house they are interested in, but require only the assurance that there are no serious and/or expensive defects or maintenance issues.

For example, I’ve had times when clients have contacted me far away places, like Cape Town, to give them an idea of the condition of a house in Randburg.

In these instances, this type of inspection is handy and ideal for those clients.

This type of inspection is informal

However, a walkthrough is not a formal home inspection. It is an informal inspection. As a result, I perform a visual walkthrough inspection of the home and provide you with comments summarizing my observations. Furthermore, my comments will be nothing more than a subjective summary of my initial observations during the walk-through.

What is involved in a walkthrough inspection?

The walkthrough requires the same time as a comprehensive inspection. On average, this is about 1½ to 3 hours depending on the condition of the property. You can ask questions and take notes while I explain the defects.

Because a walkthrough is less formal, I do not adhere to the InterNACHI Standards of Practice which requires me to produce a written report. If you are present at the walkthrough I do not generate a written report of any kind. I simply communicate my observations orally to you. You make your own notes during the inspection. In this way, you save time and money because there is no written report at the end of the inspection.

However, if you can’t attend the walkthrough I will communicate my observations to you by email.

Furthermore, because it is an informal inspection, an inspection of this type is also very affordable!

However, you will need to sign an InterNACHI Walk-Though Inspection Agreement before the walkthrough. This is to protect me against liability as a result of deviating from the requirements of the InterNACHI Standards of Practice for Home Inspections by not producing a formal report.

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THE HOME DETECTIVE » buyers home inspection

Consumers and the Property Practitioners Bill

Has the Property Practitioners Bill missed the point?

consumers

Are consumers offered more protection?

Parliament passed the new Property Practitioners Bill on Tuesday 4th December 2018. This bill has been on the cards before 2011!

The Bill was supposed to finally provide buyers (consumers) more protection in the secondary housing market.

However, it appears the Minister of Human Settlements and his staff and the National Assembly totally missed the point!

Here is that portion of the Bill:

CHAPTER 10

CONSUMER PROTECTION

Mandatory disclosure form

  1. A property practitioner –
    1. may not accept a mandate unless the seller or lessor of the property has provided him or her with a fully completed and signed mandatory disclosure in the prescribed form; and
    2. must provide a copy of the completed mandatory disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property.
  2. The completed mandatory disclosure form signed by all relevant parties must be attached to any agreement for the sale or lease of property and forms an integral part of that agreement, but if such a disclosure form was not completed, signed or attached, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser.
  3. A property practitioner who fails to comply with subsection (1) may be held liable by any affected consumer.
  4. Nothing in this section prevents the Authority from taking action against a property practitioner or imposing an appropriate sanction.
  5. Nothing in this section prevents a consumer, for his or her own account, from undertaking a private property inspection to confirm the state of the property before finalising the transaction.

This is the protection this Bill offers to buyers (consumers) who buy properties from sellers.

So what has changed? Continue reading “Consumers and the Property Practitioners Bill”