I would really appreciate your advice on the following matter.
We signed a contract of sale for a house last Friday which we inspected that day, made an offer which was ultimately accepted at the lower range of what the vendors were asking. This contract was based on us paying a deposit and having a 5 day cooling off period pending favourable finance, building and pest inspections etc.If we were to negate on the contract, we would lose about $300.
Well, we got the building inpectors report which showed a few minor defects which you would expect for a 21 year old property. The pest inspection though showed that there were active termites in a tree stump in the front yard and in the bark in the garden bed adjoining the house. They couldn’t find any evidence of active termite damage inside the house, even though the shower had a minor leak and there was some moisture behind it.
The pest inspector recommended to spray the house on the outside which they said would cost around $500 and also get rid of the tree stump which is about 1 metre high and 60cm in diameter.
My question is, should these findings turn me off purchasing the property.And if not, should I re negotiate the price( which would involve me losing a couple of hundred dollars from the deposit and potentially losing the property to someone else if it renenters the market again). The vendors were already very reluctant to accept our initial offer, but after some negotiation accepted it after previously receiving several offers below their asking price range which they had declined .
This property for us would be cash positice. The tenant is a long term tenant and we have met and spoken wit him and he maintains the property in reasonable order.It is a large country town close to all amenities and rented out at a good rate.
I am also waiting for the finance people to valuate the house – if they value the house at lower thatn what we had offered to pay then we will definetely pull out.
Any tips on what we should do?I have 4 investment properties and the 3rd property was in a similar situation as yours. If the termites are not in the house you have no problems, and if the deal is cash positive its only a small amount for the pest and repairs, and for me this has been a common issue with the properties i purchase (Pending where you buy) . Hope this helps.
[
] DomSounds ok. Pay the money for termite extermination. I dont think you could really re-negotiate for a fairly minor matter that shows no sign of damage and can be easily corrected.
If the bank valuation is lower than what you paid, how can you get out of the contract? All the bank will lend you is 80% of the valuation. It just means you need to find a little more deposit.
I would go ahead if it ‘s easily fixed by spraying and removing the treestump.
I would also consider removing the bark and replacing it with cypress, termites don’t like that so I’ve been told by a garden centre. It’s not cheap but it will give peace of mind.
Please let us know how it all turned out![
]Thanks for your replies.
After discussion with my lawyer and the agent, I have faxed them the reports as requested and made another lower offer. The agent said that instead of taking up the lower offer , they may choose to treat the problems themselves and still accept the current offer, which would suit me fine.glad to hear that last post of yours. I was going to suggest you make two offers to the vendor.
1.
they pay for the treatment before settlement and the price stays the same.2.
you deduct twice the amount of the pest remedy from the new purchase offer and you will take care of the pest treatment.The rationale for the differential being if the treatment is delayed until after settlement, there is a higher probability termites will enter the house. Plus if your contract falls through, the vendor benefits from the next pest inspection being passed.
Bruce
Mooloolaba, Qldsorry that last reply didn’t come across clearly…..
try again.1.
they pay for the treatment before settlement and the price stays the same.2.
you deduct twice the amount of the pest remedy from the original purchase offer, and you will take care of the pest treatment after settlement.The rationale for the differential being this:
– the treatment is best carried out immediately.
– If YOU pay for it before settlement and the contract falls through, then you are out of pocket, and the vendor benefits by your financial contribution, and passing the next pest inspection.
– you want to cover yourself against the risk of leaving the treatment go until after settlement and the problem getting worse, by deducting double the cost of treatment from your purchase offer.Bruce
Mooloolaba, QldI would say go ahead.
Around my PPOR I often find termites active in fire wood and other bits of wood I have lying around. They never seem to get to the house, the area is commonly known for termite activity but I know of no one that has had them in a house. My outside rumpus room had one fence poll eaten away from termite less then 2 feet from the rumpus room, and still none around there. Black ants are always a GOOD sign also as they eat the termites a friend that owns a pest extermination company has informed me. He also says look for mud trails along the house, and if u have concrete floors then u pretty safe if u don’t have them. If it has wooden floors then obviously they can come up thru the bottom with out being able to see them.
Hope this helps
Regards Bear
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DONT MISS OUT!!!!!Hi
Termites are natural in many areas, there is never a guarantee that there is none in a house.
I guess it depends on the area and the price, and for you it seems you want it, so go ahead.
I pulled out of three properties with termites, but the reasons were not the termites per se it was:
1) the close proximity to the house of the trees (one metre) that were infected
2) the wood fence was completely infested in one place
the same place, they tried hiding the termite problem and had the trees ground out- not a good idea! treat first.
3) their termite treatment had never been done
4) they refused to negotiate the price and they refused to have the treatment done at their cost,result: I refused to buy and bought elsewhere, a new place, large block and no problems, one street away.
The other place, they had bridged the building paths with concrete up to the house, so the necessary Pest Gap had been breached and was seen to be problematic.
I rented a place in bush where the landlord wanted the termite mound because she was an ecologist and said they were important, she had a completely wooden home
my tuppence worth
] Dom
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