Renegotiating based on building report

[Elliotte]

Wondering if anyone has any success stories about renegotiating purchase price on a bad building report?

My theory is that I really don't have anything to lose - we've already exchanged and I can just walk away because of the building problems and cost of repair and invoke the building clause in the contract. So for the current owner it might be a risk of lose the sale entirely or agree to drop the price. But obviously that's just theory. Worst case he refuses, I still go ahead at agreed price. Is this how it all goes down in real scenarios?

 

[swith]

For my first property, I'd initially offered $320K and I negotiated a $10K discount successfully following building report. It was a unit that needed new brickwork, replacing window frames, replacing hot wate system, etc.

In hindsight though, I'd probably offered them $10K too much to begin with....

 

[Propertunity]

Wondering if anyone has any success stories about renegotiating purchase price on a bad building report?

Yes, we do this frequently.

If the building report is pretty standard for homes like this in the area, you probably can't expect to get too much off.

If it is a surprise on the other hand, and say it costs $5K to fix, then ask for $10K, which may get negotiated back to $5K (which is what you wanted in the first place).

To give yourself maximum leverage, do the renegotiations 24 hours or less before your cooling off period expires. This is when vendors are at their most vulnerable (think they have a sale almost in the bag, before you show up with reg flags all over the building report).

 

[Bigtone]

Wondering if anyone has any success stories about renegotiating purchase price on a bad building report?

My theory is that I really don't have anything to lose - we've already exchanged and I can just walk away because of the building problems and cost of repair and invoke the building clause in the contract. So for the current owner it might be a risk of lose the sale entirely or agree to drop the price. But obviously that's just theory. Worst case he refuses, I still go ahead at agreed price. Is this how it all goes down in real scenarios?

where is the property?

Every property I have bought in QLD except 1, I have negotiated money off using the B & P , after the contract was signed, always do it as a settlement adjustment rather than adjust the contract. Never been able to negotiate in any other state.

 

[marg4000]

We have never negotiated (as a seller) on a B & P report.

We have always made it clear that the price is based on the condition of the property and only unknown problems would induce us to reconsider.

My daughter crashed a contract when extensive undisclosed termite damage repairs were discovered by the B & P report.
Marg

 

[Elliotte]

It's NSW.

How do I manage the process in the 24 hours before? I don't really want to get out so I can't go super hardline with "take 10k off or I walk" in case they call the bluff. And what is to stop them just ignoring a request for discount until building clause expires and I am locked in?

 

[womble66]

We have always made it clear that the price is based on the condition of the property and only unknown problems would induce us to reconsider.

Unknown and undeclared issues are usually what a B&P should find and these new issues are the ones that would tend to make a prospective buyer want to reconsider or re-negotiate.

Your B&P outcomes or agent declaration may have negated the need to negotiate.

My last buy was re-negotiated for $5K (in NSW so after offer accepted and before exchange) even with something's declared as agents estimate was not reasonable once assessed further in conjunction with a B&P and Pool inspection report.

Depends on supply (buyers market) & demand (sellers market) and/or your willingness or need to sell as to what outcome is achieved.

I think you situation maybe not as strong if you have already exchanged unless inside the cooling-off period even if you have a "subject to a B&P" clause.

 

[marg4000]

It's NSW.

How do I manage the process in the 24 hours before? I don't really want to get out so I can't go super hardline with "take 10k off or I walk" in case they call the bluff. And what is to stop them just ignoring a request for discount until building clause expires and I am locked in?

You have the option to withdraw from the contract before the clause expires. If the vendor holds firm that may be your only option. You will only be locked in if you allow the time limit to pass.
Marg

 

[ok180]

I got 10k off a house recently due to what was in b&p. House had a crack in the brick work. I had a builder and 3 different people who deal with these type of structural issues look at it, all but onr said it was nothing out of the ordinary so took the punt with it but got a good discount based on worse case scenario.