Property evaluation...

**Blurock** · 05-Aug-12, 04:26 PM

@ tec0, suppose you owned a 40 year old property which you wanted to sell because you have to relocate to another town. Would you lower the price below the market value just because it is an old property, or would you sell it at market value so that you can afford to buy another house?

**tec0** · 05-Aug-12, 05:47 PM

Originally Posted by Blurock

@ tec0, suppose you owned a 40 year old property which you wanted to sell because you have to relocate to another town. Would you lower the price below the market value just because it is an old property, or would you sell it at market value so that you can afford to buy another house?

I understand your reasoning and yes everyone is out to make a profit. The thing is I cannot expect to sell my home if I neglected it and did little to no maintenance on it. So as a good home owner I would make sure the property is worth the money.

And this is my case and point, some properties are in horrific condition and yet they still manage to cost the same as a new property? Or even double the price. How would you feel if you buy my property only to discover that behind the fresh paint are crumbling walls?

Fact is I also wouldn’t know if the walls are crumbling because I only saw the old paint on it. Thus the need for proper regulations that must be enforceable by law. The reality of the situation is people pay too much for neglected properties because the asking price is not regulated by a system.

With a system one can identify problems that will devalue the property thus allowing the buyer the chance to finance the maintenance if needed. Secondly it will force the home owner to up the quality of her/his building thus earning the asking price. I don’t feel it is unreasonable to identify problems like weakening walls, electrical and plumbing problems as well as a collapsing roof and deduct value accordingly.

**Blurock** · 06-Aug-12, 12:15 PM

To build a new house costs more than buying an existing, established property. Consider the time, effort and cost to establish a garden and all the hidden costs related to building a new house and you can understand why people are willing to pay more for an older house.

If the house is run down and in a state of disrepair, it will not sell at a ridiculous price. There are always alternatives on the market, so walk away and look for something else, or sit and wait until the seller reduces his price.

Regarding protection for the buyer; it is up to you to see that you trust the people who issue certificates for wiring, borer etc. The bank or bond financier will also do their inspection, but do not rely on them to protect your rights as buyer.

**Justloadit** · 05-Aug-12, 06:28 PM

You can not solve all problems with legislation. In fact I already think there is too much legislation.

Simply, if you feel the property is too high in value, then either make an offer you think is right, or move on.You will be surprised how often they accept your offer. It's about negotiating the right price.

**tec0** · 05-Aug-12, 06:41 PM

Originally Posted by Justloadit

You can not solve all problems with legislation. In fact I already think there is too much legislation.

Simply, if you feel the property is too high in value, then either make an offer you think is right, or move on.You will be surprised how often they accept your offer. It's about negotiating the right price.

I disagree; Fact is you don’t know what quality of brick was used, how long it will last and then there is a question about your electrics and plumbing alongside the structure and condition of the roof. All of these things will cost a lot of money to repair.

With legislation they can enforce quality control and alongside it an evaluation system. If the home is in good condition you get your money's worth if not you can fix it or sell for less. I don’t think this is unreasonable.

Unreasonable is not being able to afford or lose it by defaulting on the loan because of over evaluation and hidden costs.

**Just Gone** · 06-Aug-12, 09:08 AM

Originally Posted by Justloadit

You can not solve all problems with legislation. In fact I already think there is too much legislation.

Simply, if you feel the property is too high in value, then either make an offer you think is right, or move on.You will be surprised how often they accept your offer. It's about negotiating the right price.

I agree with Justloadit above - if I want to buy a house, get it checked out by the relevant professional - I then adapt the house / rebuild portions to suit me, then it is my choice - I dont need any "regulation" to tell me that a brick is old. In fact I would prefer to buy an older house - they built them better in those days.

Go to Australia or the UK and see what a legislated nanny state is like ........... I do not want to live like that !

Valuations depend on the area, the demand, the condition of the house, the municipal value and input from the estate agent ! I dont think this govenment has the time to "legislate" the condition of houses - I think we are big enough to handle that ourselves ....... and if you are not then you must get a professional to help you.

**tec0** · 06-Aug-12, 09:46 AM

Originally Posted by Kevinb

I agree with Justloadit above - if I want to buy a house, get it checked out by the relevant professional - I then adapt the house / rebuild portions to suit me, then it is my choice - I dont need any "regulation" to tell me that a brick is old. In fact I would prefer to buy an older house - they built them better in those days.

I also agree with this, you must do an inspection in order to know what you are getting yourself into but in the end regardless of the inspections the prices remain very high for very poor quality properties. herein is my concern, the inspection get's "downplayed". Yes you can walk away from the property but this seems to become the statuesque.

Originally Posted by Kevinb

Go to Australia or the UK and see what a legislated nanny state is like ........... I do not want to live like that !

An old property cost less in those countries as shown on the house and home chancel.

Originally Posted by Kevinb

Valuations depend on the area, the demand, the condition of the house, the municipal value and input from the estate agent ! I dont think this govenment has the time to "legislate" the condition of houses - I think we are big enough to handle that ourselves ....... and if you are not then you must get a professional to help you.

Sadly you have no room for negotiations anymore. Fact is the more money they can make of you the better of they will be so they have no reason to open any channel of negotiations. With legislation those channels remain open.

**adrianh** · 05-Aug-12, 06:45 PM

Buying and selling property is no different from buying and selling cars. A bank won't lend you R700K to buy a Golf I. The bank values the property to ensure that if you were to default of the loan that they will be able to recover the loan by reselling the property (ok, in theory)

The problem is not the value of the property per se, the problem is the replacement cost of the loan.

**tec0** · 06-Aug-12, 08:08 AM

Originally Posted by adrianh

Buying and selling property is no different from buying and selling cars. A bank won't lend you R700K to buy a Golf I. The bank values the property to ensure that if you were to default of the loan that they will be able to recover the loan by reselling the property (ok, in theory)

The problem is not the value of the property per se, the problem is the replacement cost of the loan.

The truth is if you have to pay the true value of a property and not the thumb-suck value the chances are that the property may become cheaper and you may even be able to improve on it since you paid less for it. However because houses are over evaluated you end up needing to take a bigger loan.

So basically the evaluation system will protect you against over spending on a bad property. I don't think that is a bad thing...

**Blurock** · 07-Aug-12, 09:43 AM

The employer or the state can never be held responsible for providing housing. In a fluid and free labour market where people can choose where and for whom they want to work, you can never pin people down to just one address for ever.

I have met a couple from an ex communist country who had to wait 9 years for a one bedroom flat in a crummy suburb. They are both doctors and decided to flee to South Africa when they had the opportunity.

In Italy it is common for boys to stay with their parents until well in their 30's, before they move out on their own. Obviously mama's cooking will have a lot to do with that decision. In many cultures it is customary for the family to stay together in the same house. However, changing economic cycles and markets have forced job seekers to relocate to where there are better work prospects. Migrant labour has also had it effects and appears to be an issue in countries such as China and Mexico.

Some people are fortunate to inherit property from their parents, others have to save up for their own. Some of us are rich, some of us are poor. This is as a result of our own choices in life and how the dice has fallen for us. Unfortunately that does not entitle us to free housing.

Once you own a house, the government will do its best to tax you out of the house. To own a place of your own is not a right, but a privilege. As the saying goes, "my house is my castle".