Offer to purchase question

Koorsblaar said:
Q2: House has been in the market for more than a year with price coming down over time. It was also part of a divorce.
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This has me a bit worried. Where is this house situated? Most places (specially these days) sell quickly, due to the interest rate. So if this one doesn't sell it's either fatigued (people know it, know it's not selling so they're simply not interested and scroll on by), or there are more issues to the place you don't know of. I'd be careful, saying with all the info I have on the place, of course.
 
RonSwanson said:
Add rates being up to date, as you have suggested, and:

  • That you (the buyer) will pay for an inspection from a house inspection professional; (this will cost 4-5000 ZAR)
  • That all items identified by the professional inspector's report are taken care of by the seller using appropriately qualified people and to the satisfaction of a building professional;
  • That water is reconnected before inspection -- very important, the pipes have not had any water through them for two years and the professional inspector needs to do a pressure test.
  • Electrical CoC is provided at the cost of the seller; you will need to budget for your own one afterwards as well just to make sure that he didn't just buy it.
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Thanks to all for the responses so far.

I'm in the process of engaging a house inspecting person, just not sure whether I should do this before or after the OTP. I dont think the seller will want to remediate at his cost, it sounds more like he wants it to be considered in the price offered, which likely means the inspection beforehand, so that we can consider it in our offer, and placing the expense "at risk".

I am concerned about the COC and quality thereof, but that isn't specific to this place, just in general.

Toxxyc said:
This has me a bit worried. Where is this house situated? Most places (specially these days) sell quickly, due to the interest rate. So if this one doesn't sell it's either fatigued (people know it, know it's not selling so they're simply not interested and scroll on by), or there are more issues to the place you don't know of. I'd be careful, saying with all the info I have on the place, of course.
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There are quite a few houses where the owners insist on putting the properties up for sale at prices higher than "market prices" resulting in buyers just scrolling past the familiar pictures as you stated.

The risk is that there is something else unknown to me, so trying my best to research and getting professionals in to inspect and quote. One of my thoughts are that people like simply moving in to a house, and dont want to spend additional money, so interested buyers are narrowed down.
 
Nah the market for bargains are huge, so perhaps it's because the owner put it up for way too high. I remember we went to look at a house in Rietfontein in Pretoria. Cheaper area (although not too crappy), and it was a smallish 3-bed house with minimal maintenance done on the place in years. Needed new paint in and out, some of the parquet floors were loose, nonexistent back garden, garage literally falling apart, off-spec "flat" built in the back out of an old Wendy house, etc. Yet the owners said they wanted nothing less than R1.6mil for it. I just giggled and told the agent I'll put in an offer, but no more than R1.1mil.

I don't even know if they place sold yet.
 
Koorsblaar said:
Thanks to all for the responses so far.

I'm in the process of engaging a house inspecting person, just not sure whether I should do this before or after the OTP. I dont think the seller will want to remediate at his cost, it sounds more like he wants it to be considered in the price offered, which likely means the inspection beforehand, so that we can consider it in our offer, and placing the expense "at risk".

I am concerned about the COC and quality thereof, but that isn't specific to this place, just in general.


There are quite a few houses where the owners insist on putting the properties up for sale at prices higher than "market prices" resulting in buyers just scrolling past the familiar pictures as you stated.

The risk is that there is something else unknown to me, so trying my best to research and getting professionals in to inspect and quote. One of my thoughts are that people like simply moving in to a house, and dont want to spend additional money, so interested buyers are narrowed down.
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This is something that you need to be sure of. You cannot drop 4-5K on a whim, and then basically hand him a free fault list at no charge. You need to engage with him on this and get clarity.

Remember that because the home is in a sh1ty condition, his market is extremely narrow, only two kinds of buyers: those with access to cheap resources (builders, developers etc.), and those who are foolishly desperate. Hopefully you do not fall in the latter category.
 
Good that you're going to get in a building inspector. This should be an expert who has years of professional experience as, for example, a structural engineer or a master builder. Do not get in the type of inspector that comes from the other side, i.e. the insurance or banking sector. The reason I say this is that those 4000 to 5000 that you pay must be to someone who knows his stuff, who is not afraid to get his hands dirty, and can crawl up and down and try out everything, and explain what he is seeing, and not someone who is simply ticking boxes on a form.

If you can afford it, I think it is a cleaner deal to get in that inspector at your own expense before ever putting in an offer. Better yet if you can obtain the official municipally registered building plans, before the inspector gets to the property. To do this, you will probably need written consent (and perhaps a copy of an ID) from the current owner. Then the inspector can work with his own senses, and also check the plans.

Your inspector should tell you, in each room, what he is looking at, and on the basis of what, exactly, he knows a defect when he spots one. Take lots of photos. As you go along, or at the end, make a long list and ask him for a guesstimate of what it would cost to fix up each item he saw that needs doing.

And then.... make your OTP based on that, either by requiring the owner to fix those things, or your purchase price set accordingly to that you can get them done yourself.
 
Toxxyc said:
Second Q - Why only selling now after 2 years?
Third Q - Why did it stand empty?


PS: On properties like these, DO NOT trust an agent. They lie a lot more when there's a lot more to hide.
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Visit several sets of neighbours and ask them these questions. If they like living there, how come none of them, or their friends or family, has bought this house before now?
 
Koorsblaar said:
Hi all

I’ve been reading this thread for the last few months since we started looking at houses and now we found a house we like. It’s been standing empty for close to two years and the water and electricity has been cut off. After due consideration we want to put an offer in, with a price reflective of the cost to repair and risk involved, and I thought I would post the issues and considerations here as there has been a lot of good advice in this thread, with the hope of giving me more confidence in putting in an OTP and that I have covered the risks sufficiently.

The good:
  • The house has been standing empty for 2 years so leaks and other issues should show themselves after this period with no maintenance. It mostly looks very good, and a proper cleaning of tiles inside will make it look good, with painting the walls over time.
  • There is very little damp damage. Mostly at driveway walls and back door at garage. The garage issue looks to be due to blocked gutters, causing water to penetrate the wall. The driveway wall has more damage, but looks like minor cracks and paint peeling at places.
  • No vandalism, so looks like it is quite a safe / secure position.
The bad:
  • Electricity and water are cut off, so we don’t know what electrical items work and which don’t. Also not sure of the state of the water pipes / leaks and whether this is a possible issue.
  • The pool is in a state. I’ll budget to get it recoated, probably fibreglass from what I’ve read online. It seems to hold the green rain water quite well. No idea about pump and heat pump.
Do you have any advice for me on the following, and possible other issues.
Building:
  • We plan on getting a building inspector to do an inspection, but we aren’t sure whether we should do this before the OTP, or simply specify it as a condition. If it is a condition, what wording should we use to protect ourselves?
  • Electrical.
  • The house is wired for three phase, but supply is disconnected. I want to specify that the owner needs to reconnect with a prepaid meter. The reason it is currently disconnected is that COJ kept on estimating usage at 5 000 units per month when the place was empty and owner refused to pay. I don’t want post-paid issues and also don’t want to pay for the monthly service and network charges associated. From what I can see the prepaid cost for 1 and 3 phase are the same. Is this true?
  • Uncertainty on which electrical items still work. Gate and garage motor, oven, aircons, pool pump and heat pump. Owner does not want to make any commitments as he hasn’t lived there in years, so price will need to consider that.
  • Should I get an electrician to inspect beforehand, or will COC before transfer cover me sufficiently?
  • Plumbing:
  • This is where I am concerned, and I don’t know much about plumbing. Is there a heightened risk of pipe leaks and issues, and geyser issues because the water has been cut? Is there a way to mitigate or test for it?
As a summary, what OTP conditions should I specify? My list currently:
  • Water and electricity to be reconnected. Electricity to be put on pre-paid.
  • Subject to a favourable building inspection report (not sure of the exact wording to protect me here. We don’t want to be stuck with a medium or large structural cost.)
  • Building plans and that everything is in order.
  • Others are subject to bond, and sale of our house. I am concerned about the timing of the sale of house. I don’t want to sell my house and then be homeless because the seller is taking long to sort out the electricity and water.
Apologies about the length of the post, but thanks in advance.
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Last week I sent an inspector to a property before I signed an OTP, did a full inspection which cost about R4 400
Inspected the building, garage, roof, geyser installation, pool, visually just checked exposed plumbing pipes, checked toilets etc.
the risk was that if someone puts in a OTP before the inspection and report was done.

Really happy with the inspection that was performed, was done on the Thursday morning 09:00, and Friday around 16:30 I received the report,
+-60 Page report with photos of all the things the inspector picked up.

I have now signed the OTP yesterday with an offer less than asking price (gave the seller until Thursday the 18th to make a decision),

Seller does not have approved building plans and has agreed to pay for the re-draw and getting it approved.
Inspector is happy with the place and indicated that the plan approval should not be an issue.

If you are looking for a inspector(in Gauteng) let me know and I will send you their details,
Inspector also assisted me by going over the OTP and telling me what to remove.
 
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Koorsblaar said:
Thanks.

Q1: Yes, owner stopped paying as they were estimating electricity far in excess of usage. Agent says seller did previously sort it out, but estimating resumed again. He is now only willing to reconnect and sort it out once he has an offer he is happy with. He will pay someone to "sort it out". All for his account. I'm happy with that, I just dont know how long it will take, and hope the issues dont move to my account, which is why I think prepaid is a better and less risky option.

Q2: House has been in the market for more than a year with price coming down over time. It was also part of a divorce.

Q3: Previous tenant didn't pay properly. Owner can afford to let it stand empty.

I forgot to mention that the house was built 2001 - 2003.

Thanks.
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There are some red flags, if the seller was renting out the property previously and they cannot let the property stand empty, then why did they not get another tenant into the property when the previous one left.

If you really like the property and have a rough idea how much it would cost to get the house to acceptable levels and have an idea of what the seller will be willing to accept, I would recommend you bite the bullet and get a professional inspection before putting in the OTP.

Just guard against the emotional attachment, the longer you contemplate on this house the more you get attached to it, it will be in your best interest to finalize things sooner.
 
The plumbing and electricity being unused is a issue. Geysers stop working,pipes and taps stop working
 
Also eyeing a place at the moment and wouldn't mind getting an inspector to take a look.
The problem is in the areas I am looking houses tend to fetch the asking price and sell in a week. I get the impression if I faff about with an inspector, they will just accept the next offer.
 
Brawler said:
Also eyeing a place at the moment and wouldn't mind getting an inspector to take a look.
The problem is in the areas I am looking houses tend to fetch the asking price and sell in a week. I get the impression if I faff about with an inspector, they will just accept the next offer.
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This actually happened to me. 2 banks wanted me to get an inspector before granting the bond because of some cracks. 2 banks did not need it.

I phoned to guys in the area and they wanted to make an appointment for the next week. The estate agent in the mean time gave us 72 hours(it was a clause in the OTP) to get a bond or they accept the second offer which was a cash offer(estate agent did not know about the banks requiring an inspection).

I decided to take my buddy who is an architect with me to go check the place out and he was happy with what he saw. Felt it was only plaster cracks and the place(21 years old) have never been painted since being built so everything that can show was visible..... so went with one of the other 2 banks which did not require and inspection.
 
Oh yes, another thing based on Terence's post above - if you go view a place that's for sale and it smells of fresh paint - know they're covering up cracks.
 
Quick question.. Just bought an apartment for 660k in jhb ..how do I know what amount my rates and taxes will be.. Also how do I open up a rates account.. Is it an easy thing as I see some companies are quoting R1200.00 to do it on my behalf
 
RedViking said:
So what.... they must not paint it?
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Generally, no. It rarely helps anyway. The fixes like painting before selling costs you more than what you'll get back. For example, if it costs you R50k to paint out your house, you can't sell it for R50k more. A bit more, but nowhere near what it costs to paint.

All I'm really saying is that if you're going to look at a house and the walls and ceilings are freshly painted - look closely. We went to look at a house that people bought "freshly renovated". Turns out the guys who sold it literally sprayed expanding foam in the cracks, sanded it down and painted over it just to sell the house. House was cracked to ****. 4 years after the sale the tiles started lifting, windows broke and the walls cracked further so bad the people lost R800k just trying to get rid of the place.

The sellers? Overseas.
 
STORMERSFAN said:
Quick question.. Just bought an apartment for 660k in jhb ..how do I know what amount my rates and taxes will be.. Also how do I open up a rates account.. Is it an easy thing as I see some companies are quoting R1200.00 to do it on my behalf
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City of JHB usually receives instruction from the deeds office and/or your conveyancer.

I bought a free standing property last year November(deeds transfer date), went into city of JHB offices early January and asked to register for electricity, water and rates. Was sorted pretty quick, about an hour.
So just go in after about 8 weeks after transfer date, with the documents from your conveyancer, and ask city of jhb to register you.
Your rates will be about +-R500 for that property value based on one of my properties with similar value.
 
Thank you all for your input so far. I'm trying to make notes of all the advice given, and will need to consider what risk I am comfortable on taking.

@Colsuldel I've sent you a message.

PsyWulf said:
The plumbing and electricity being unused is a issue. Geysers stop working,pipes and taps stop working
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I'm comfortable with taps and geyser. Those can be replaced easily, but as you say, the pipes are where I am more concerned as these are more difficult to get to..

Does anyone have a view on the 3 phase electricity, and possibility of getting it on prepaid, and is the cost the same as one-phase?
 
Koorsblaar said:
Thank you all for your input so far. I'm trying to make notes of all the advice given, and will need to consider what risk I am comfortable on taking.

@Colsuldel I've sent you a message.


I'm comfortable with taps and geyser. Those can be replaced easily, but as you say, the pipes are where I am more concerned as these are more difficult to get to..

Does anyone have a view on the 3 phase electricity, and possibility of getting it on prepaid, and is the cost the same as one-phase?
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Which municipality. I know for Tshwane 1 phase and 3 phase cost the same
 
Fcon_Vpro said:
City of JHB usually receives instruction from the deeds office and/or your conveyancer.

I bought a free standing property last year November(deeds transfer date), went into city of JHB offices early January and asked to register for electricity, water and rates. Was sorted pretty quick, about an hour.
So just go in after about 8 weeks after transfer date, with the documents from your conveyancer, and ask city of jhb to register you.
Your rates will be about +-R500 for that property value based on one of my properties with similar value.
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Would u say it's worth it to try do it myself before forking out R1200 for someone's else to do.. Which municipality would I go to.. I'm based in Wilgeheuwel.. Roodepoort.. Thx in advance
 
STORMERSFAN said:
Would u say it's worth it to try do it myself before forking out R1200 for someone's else to do.. Which municipality would I go to.. I'm based in Wilgeheuwel.. Roodepoort.. Thx in advance
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I thought it was easy enough but all depends on how you value your time. With driving, waiting in queues, system down time,etc the R1200 might be worth it.
You can probably go to the Roodepoort civic centre if I remember correctly but I've always gone to Sandton.

Check this document for more info:
 
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