Hey all,
I was doing some thinking and was just wondering if a building or pest inspection fails, say for example the place had a termine infestation, or there was some defect with the building costing a few $1000's to fix, what would you do? Cancel the contract given you had this condition on the there? Ask the vendor to fix and still purchase? Go halves with the vendor? Any other options?
Hi Zayne,
I would still purchase but get the vendor to pay for the repairs needed. I have recently done this for a property that had termites in one section. I had two thorough and independent pest inspections done as well as a building inspection. The vendor agreed to fix all the damage that was caused and a few other little things picked up by the builders inspection. I guess some people would and wouldn't purchase. But I don't see a problem. BTW the vendors solicitor is holding back $5000 in a trust from the purchase to pay for the repairs. So I know it will be done at their cost.
Hi Zane
Another option would be to get a quote for the work required and take this amount off the purchase price. Regardless of whether you do the repairs yourself at a cheaper price. The way you have control of the property sooner. However you need to weigh up if it is cheaper to do this and pay the holding costs or get the vendor to allow you early access to complete the work prior to settlement thus avoiding hadditional holding costs but also lowering the purchase price. You may prefer to go withDarren's suggestion so that you don't need to outlay the cash to repair the property and keep the purchase price as per the contract giving you maximum borrowing power against the property.
Sounds like fun!
Claire
Thanks guys. Well turns out pest inspection came back good however building inspection wasnt so great. Ive been told that the building is sinking 2-3inches on one side and will cost approx 120-150K to underpin. This should be covered under body corp which will be split by 26 people meaning 5-6K each. Due to this movement there is a fair bit of cracking in the kitchen and bathroom which needs to be repaired. What would you guys do in this situation? Ask for the vendors to drop the price 6K +? Other sugeestions?
Hi Zayne,
I did not realise it was a unit you were purchasing. It should not really matter though. If there is nothing else around that interests you and you really want this particular unit (for value and locality sake not necessarily because you like it) then get the price reduced, I would actually push for a further reduction for the inconvenience factor and also the reapirs to the cracking in the bathroom and kitchen that you will have to fix. If the price has already been agreed upon it can be renegotiated due to the builders report. They should do it and if they don't go elsewhere. There really are plenty of propertys available for purchase that wont need major work done to them.
Good Luck
personally , unless it is a very minor point, I walk. If it is something I dont have total control over (like body corporate matters) I walk faster. It just adds complexity and there are many other properties…..
Hi Zayne
I would be running from the contract. If there are serious structural problems, who knows what will happen in the future, even if this problem is fixed. Also, to get the problem fixed, every unit holder will have to contribute $5 – 6000. What happens if one owner doesn't have this kind of money.
Sounds like a potential nightmare to me. I wouldn't touch it.
Cheers
K
Thanks for the input guys. Much appreciated.
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