More houses…more estate agents…more disappointment…

While the process of buying a house here is largely like the process in the US, there are some differences. In the States, for example, once an offer on a house has been accepted, the marketing of the house ceases. The buyer and seller have a contract, usually with some contingencies included that could result in one of the other of them being able to back out of the contract, but if you accept an offer from me for your house and somebody comes along a couple of days later offering you more money…and in cash…you are out of luck unless I am unable to secure a mortgage (bond) or sell my present residence (assuming the sale was contingent upon selling it) or some other such circumstance.

Not so in South Africa. If you accept my offer for your house, unless I have offered you cash, you still have options open. A contingency sale, for example, can derail if you get a cash buyer, even if you have accepted my contingent offer. In such a case, I get 48 hours (used to be 72) to come up with enough cash to cover my offer to you or I lose the house to the cash buyer. There are certain other conditions under which an accepted offer can be invalidated as well, so even after your offer has been accepted, the owner and the [real] estate agents will continue to show the house to prospective buyers until your bond is granted and the money is in the hands of the seller’s attorneys.

Buyers here are greatly at risk. The estate agent works for the seller, as do the conveyancing attorneys. We don’t have escrow companies here, so the money and paperwork transfers (such as deed registration) are handled by specialist law firms…who are engaged by the sellers, not the buyers. We also do not have title search companies, but the deeds registering office is supposed to make sure the property is free of liens prior to the transfer…and if there are liens, it is the job of the conveyancing attorney to clear them from the funds he has received from your lender prior to handing over cash to the seller. The conveyancing attorney acts very much like an escrow company in the US, but with one notable difference: in the US, escrow companies are, by their nature, objective in their dealings; here, the conveyancing attorneys work for the seller and sometimes that works to the buyer’s detriment.

So, knowing that the estate agents and the cash-and-document transfer specialists are in the employ of the sellers, we approach our house hunting with great caution: we’ve been burned once by an unethical, thieving seller and shafted by both her agent and attorneys…we aren’t going to allow it to happen again. We therefore take agents’ ecstatic waxing about houses with a lump of salt and expect very little…for a great deal of money.

Houses here are sold “voetstoots,” an Afrikaans word meaning “as is.” This can work both for and against a buyer: on the one hand, the house must be in the same condition (and have the same fixtures) as when the buyer viewed the house (items specifically noted as exceptions excluded)…but if there are defects in the house that the buyer failed to notice, he’s stuck with them. Yes, there is a clause for latent defects (i.e., the roof leaks, the seller knew about it and concealed it), but activating that clause is prohibitively expensive (I know, I sued that unethical, thieving seller a few years back). But if your seller is moving out of the country (which is common around here), the latent defects clause is just pointless…even if the house collapses around your ears, you have no recourse. So, we are very cautious about houses that look like they will need work, especially with regard to drainage, foundations, plumbing, electrical work and roofing.

Last week we called an agent about a house in Paulshof, a nice upmarket suburb within easy commuting distance of Hubby’s job. She took us to two houses, neither of which met our requirements, and neither of which were the house we called about! Leafing through her book of open mandates, she flipped to the page with the house on it and I stopped her…“That’s the house we called about,” I told her. She seemed surprised but promised to set it up and call us back.

Well, for some reason she turned it over to her partner (miffed that we didn’t like the houses she showed us, even though they clearly did not meet the requirements we gave her?) to show us. The internet ad showed a neat brick house and the description fitted our needs. It also included two rental cottages and river frontage. The only thing that bothered me was the lack of interior photos, but I know that sometimes that happens because nobody was home the day the photographers came to take the pictures.

Well, I should have listened to my instincts. The house was shabby, both inside and out. It was a panhandle house, reached by a narrow, twisting driveway and located behind one house and bordered closely by another house and a huge apartment complex overlooking the garden. The view to the front was a rubble pile backed up by the house in front, the view to the right was the roof and windows of a neighbouring house less than two metres away, the view to the left was a multi-story apartment complex with at least two floors of windows looking directly down into the front and back gardens, and the view to the back, which should have been inviting river frontage, was that of a cliff as seen from behind a massive snarl of razor wire. Oh, there was a river, all right, and you could hear it flowing…but you couldn’t see it because it was at the base of the cliff, masked by the razor wire barricade.

Inside, the house had once been attractive, but now it was just shabby with age and neglect. The owner, a frail woman who looked to be in her eighties, was just no longer robust enough to keep the place up. A kind of dingy grey overlaid everything, from the paint to the windows to the carpets to the furnishings. Most of the rooms were of a generous size, save the living room which was amazingly small, none of the bathrooms had seen renovation since the construction of the house, and the work that had been done to renovate the kitchen had left it a dark, disjointed, poorly designed and shamefully executed space (the lower kitchen cupboards, for example, were so out of plumb that it was obvious to the naked eye!).

The garden was a wreck. Oh, it was planted and neatly trimmed, but there was a huge gouge in the earth, nicely covered with lawn, that would doubtless fill with water during the rains and become swampy, as it had no outlet to the river’s edge or to anyplace it could drain. Evidence of neglect was everywhere, from the peeling paint on the window frames to the threadbare garden to the scummy shower tiles. But the shocker was that she had wanted to list the property for more than R2mil and only settled for R1.95mil when the agent simply refused to list it for that.

Looking at the work the place needed, especially the fact that the back garden would need a visit from a hydrologist to work out proper drainage for that gash in the earth in the back garden, and the fact that to give the place even a semblance of privacy the front garden wall would have to be raised at least two metres and tall trees put in to screen the property from the prying eyes of the apartment building, we figured the place probably needed close to half a million in work. This figure took into account the need to completely re-do the kitchen and renovate the bathrooms, install a security system, and relandscape the back garden as well as haul away the rubble in the front of the house and landscape that area which, presently, is nothing but bare sand, piles of construction debris, and a lone tree. At the end of all that expense and work we would be left with a small house with a tiny garden…perhaps a hidden jewel, but even then, barely worth the nearly R2mil she was asking for it.

We asked the agent if he had explained to her the fact that, no matter what a buyer wanted to pay, the lender would send out an appraiser who would value the property and the lender would not lend one rand more than the appraiser’s estimation. He said he had. We then asked if the woman was aware that the properly could not possibly appraise for her asking price and, in fact, might not even appraise for the R1.5mil we might consider offering, in present condition. He said he had…but she was immovable.

And so, we go to see another house today…we’ll see how that one goes.