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.

**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.

**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.

**AndyD** · 05-Aug-12, 10:52 PM

If a house is in poor condition it will be valued lower than a similar one in the same area that's in good condition.

When you buy a house you can get an engineers report, electrical report, bug report, plumbing report etc to highlight any quality of safety problems and avoid any nasty surprises.

**tec0** · 06-Aug-12, 07:58 AM

Originally Posted by AndyD

If a house is in poor condition it will be valued lower than a similar one in the same area that's in good condition.

That is what is suppose to happen sadly I have proof that sellers will ask the same money for a bad house in the same aria as the good house. I know of a property that is not worth more than R150k and yet the asking price is equal and in some cases more than the other properties in the same aria.

Now I know the history of the house and you will basically only buy the property in the end. The structure is toast.

Originally Posted by AndyD

When you buy a house you can get an engineers report, electrical report, bug report, plumbing report etc to highlight any quality of safety problems and avoid any nasty surprises.

Now I feel we are in the same ball park. I feel that the inspections must be done by the seller not the buyer and that the fixing costs must be considered when an evaluation is past. Sadly this doesn’t happen, and that is why we need an enforceable system. Basically it will protect both the buyer and seller.

**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...

**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.