Greetings everyone.
My wife and I decided to look for our first investment property. We chose the Western suburbs of Sydney. I found a place that appears to generate sufficient rent and a tenant who is willing to stay. So after looking at the property I spoke to the agent and asked for about 5% reduction in the price. The agent called back and said the owner agreed. Which I found a bit odd as usually the person selling at least tries to negotiate back.
We did residex report of the property and the price estimate came back about 20K cheaper than we bargained for (so the original asking price was even higher).I feel like I should have offered a lower price to start with. My idea was to do a pest and building inspection and if there are reasonable problems with the property I come back to the agent with a list of problems and my price estimate report and ask for a lower figure. Obviously if the house has major problems I will probably walk away as its not worth it.
Do you think this is a good idea to further negotiate the price down? Also About four years ago I believe the owner did a small renovation on the kitchen and bathroom. Does the residex report take that into account?
Thank you for any input.Hi there
Just because the lower price was agreed to doesn't necessarily mean you've landed a bad deal. Do you know what's motivating the vendor to sell? Maybe they're after a quick sale.
If the building/pest report comes back with issues that need to be addressed then you could always request a discount on the initial offer given the amount of work required.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Sorry, forgot to mention – Residex won't pick up those renos.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thank you Jamie
Hi Sashatheman,
We were recently in the same boat as you – what we did is had the building inspection done as well as quotes for any work that needed to be fixed. We then went back to the vendor and said either you fix the structural issues or we reduce the price by the full amount of the quote. Legally they only have to fix the structural issues, but because we knew they wanted a quick sale they reduced the price by the quote amount so we could still settle on the same day. Maybe if you get quotes for the work and if it's more than you have already negotiated it could be the basis for further reduction.
Good luck!
KateIf the inspection report is not to your satisfaction then the condition has not been met. If it is not to your satisfaction then you can decide what reduction in price would bring it back in line with your satisfaction and you don’t need quotes either. Obviously if the vendor thinks that you are gouging too much then they will not agree and the house wont be sold to you.
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