Spotting a lemon

02/10/2000 MM By Nicholas Mun

IGNORANCE is bliss. That is true until you find yourself with a leaky roof and shortly after that, a hefty repair bill. The words we should chant like a mantra should be: `knowledge is power'. Knowing the true condition if the property will firstly put you in a stronger bargaining position as compared to being completely ignorant of the condition.

Secondly, it will also help get the price you want - a price that takes into consideration the forseeable repair costs that will or may arise when you move in. That is the point about ascertaining a property's condition. It is not so much for the potential buyer to turn his or her back on the property though that could be the case if the condition is just so deplorable that it would not be worth undertaking the repairs that come with it. Having said that, many homebuyers are not aware of the problems that say, a house may have, only to find out that they perhaps paid too much for it given its condition.

Few in this country bother to go beyond the cursory inspection - the `once-over' so to speak, before they sign up. More often than not, potential buyers rely on appearance. But unfortunately, there is a whole lot of truth in the saying that a fresh coat of paint will make it (be it a house or a car) look like new.

Great reliance is also placed on what the vendor and/or the agent have to say but they are under no obligation to disclose all information especially if they have not been queried specifically about the property.

So, you can be sure that negative information will for sure be left out to avoid jeopardising the sale. And so long as you proceed on the premise of the building's appearance, you are liable to end up with a lemon for a home. Sometimes it doesn't help that potential buyers are also caught up in the excitement of making a purchase and will quite likely miss defects by giving the home a `once-over' only.

After all, how many people actually take the trouble to inspect roof or ceiling cavity? A more considered approach What is required is a more considered approach. The Law Society of New South Wales, Australia prepared a document some years ago concerning what a `sensible purchaser' would in purchasing a property. The document stated that the purchaser would require the following:
 

* proof and analysis of the title;
* negotiation and administration of the contract; and
* proof of the quality of the property.

In the Malaysian context, the first two aspects would have been adequately addressed by a solicitor diligently performing his/her duties. The last aspect is almost always never addressed by solicitors and so is left to the buyer. If the buyer fails to address this issue of condition and should it crop up at a later stage after the sale has been completed, then any liability will have to be absorbed by the purchaser. The buyer will have lost the opportunity to resolve this issue, which could have been put to rest with something as simple as a price reduction by the vendor.

Assessing the condition

What you need here is assistance such as that offered by a mechanic when you purchase a second-hand car. Here you would be looking at enlisting the help of an architect or contractor. In most cases, this will be adequate provided that you trust them and are convinced of their ability.

But if you fancy yourself as a handyman of sorts, then these are the areas that you should go over when viewing a house.

Hazards

This concerns issues of life and safety. What you should be looking for here are loose handrails, asbestos ceilings, and poor wiring.

Movement

What you would be looking for here are signs of movement in the ground beneath you. Check for cracks both inside and outside the house. If serious, it could affect the structure of the house rendering it unsafe in the long term.

Damp

Look for water stains and fungus that comes with it. Feel the walls to check if they are cooler the normal.

Finishes

Check the overall condition of the finishes of the home. Anything that is loose or worn may need replacement or repair after you move in. This would include tiling, window frames, floor and skirtings.

These are just some of the things that a potential buyer should look at. Ultimately, how extensive you need to be will depend on the house and its age. Don't rush the viewing and try to find out as much as you can. That's the only way to spot a lemon.