We have just had a building inspection done on a property we are wanting to purchase. We have already negotiated $21k off the asking price mainly because of some repairs that we felt needed fixing although I didn't mention this to the real estate agent.
Has anyone gone back to the agent/vendor to re-negotiate further deductions after the contract has been signed? I would be interested to see where we stand.
Most points are small minor issues, but one is an outdoor slab under a patio that is cracked because they didn't use reinforcing mesh when it was poured …. a real home job by the looks. A section may need to be removed and redone ….. Still trying to get hold of the building inspection man to discuss probable costs.
All views greatly appreciated.
Martin
Do you have a subject to buiding inspection clause in your contract?
If so, that allows you to walk out of the original contract and renegotiate new terms and price. All you need to do is tell the agent that due to the buiding report you are no longer accepting the contract and you would like to negotiate a new price. They would then draw up an ammendment to the contract.Please be aware that the vendor does not have to accept the lower price and the property can be put back onto the market because the original contract no longer stands!
Be willing to walk away and be realistic. Are the costs reasonable? Have they already been reflected in the asking price? What are other properties going for with those defects?
Thank you Adprop.
Your reply was very helpful. I'm still waiting for a call back from the guy that performed the building report to get an idea of costs. The original asking price for the property was $249k, I negotiated down to $228k. I was aware that a few problems existed, but I just need to to know approximate repair costs before making a decision.
I felt that the $228k was a more realistic market value for the property as confirmed by the valuation I had done and comparing like kind sales in the area. The building is a corner block that can be subdivided as the house is built on one half on the block which is another appealing aspect to it.
Your information about how to walk out of the original contract and renegotiate new terms and price is very useful and I thank you for that. Some decisions to be made, but I need more costing information before I make that call.
I will post the outcome.
Martin
Two quick things on this.
1. Properties are purchased in as in condition that is as you inspect is as you purchase the property. That we be where the negotiations have take place to this point.
2. The point to impress on the Seller via the agent is that the things revealed in the building and pest report aren't going to go away. That is either the Seller is going to have to take action to repair them or they will still be an issue when negotiating with other Buyers should the current contract fall over. Obviously the best way to approach further reductions is to furnish realistic figures for rectifying issues identified in the report.
Most definitely negotiate a further concession from the Seller for issues which were not apparent at the time of inspection and latter identified by a building and or pest inspection. Happens all the time so make your conveyancer or solicitor do the hard yards on this.
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