Can anyone help…..I have negotiated the price on a property which has been accepted. I have sent through the building inspector, and the pest inspector goes through today. I have not signed any contracts as yet, but have mentioned to the agent that the building inspector has found a few things that I would like to negotiate with the vendor about, but it seems that now we’ve got an accepted buy price, that the agent is trying to fob me off with these other issues. Does anyone have any hints or tips as to how I can get the price down further, I want to get at least another $5K off based on what the building inspector has told me, up to $10K or more depending on what the pest inspector comes up with.
I know I can just walk away and lose the money I have spent on the inspections and solicitor, but would rather try to negotiate….
Any suggestions greatly appreciated…[
]Hi Jarmbie,
I’m a little confused about your post. You say the offer has been accepted, but you haven’t signed a contract yet. Usually once an offer has been accepted, you sign a contract but subject to building/pest inspection, finance, etc.
As you haven’t signed anything, be firm with your new offer and state clearly your reasons for the drop in price. Tell the RE that the building isn’t up to scratch and that there are several things that need to be done to make the place suitable for your purpose
Perhaps you could put it in writing to show that you are serious.
Cheers,
Sue []“Be careful not to step on the flowers when you’re reaching for the stars”
Hi Sue,
thanks for your reply. I found it strange myself…the offer was accepted after toing and froing with the price, the contract was sent to my solicitor, and the property was taken off the market (or at least it went off the agents website) I have got the necessary clauses being put into the contract by the solicitor, but he told me once the contract has been signed, I can’t go back and negotiate the price down. I find that bizarre, because otherwise why would you put the clauses in otherwise….we have put $1000 as deposit to hold the property, but are holding off signing the contract until a)I’ve gotten the inspection reports and b)the deposit money is coming from equity in our PPOR and we won’t get that till next week when the bank settles it.
Am I doing the wrong thing?Jarmbie
The minimum deposit allowed is $50. Get that written into the contract sign it and you are in a better position without tying up $1000.g’day jarmbie
did your offer contain a clause saying subject to buyers acceptance of building inspectors report or something of the like. this will give you something to negotiate with.
on the other hand – just about any property will have a few problems with it after an inspector has gone through it with a fine tooth comb. if the problems with the property are minor problems that you should expect with a property of that age etc etc then you probably should have thought about that before you agreed to a price.
cheers
Jarmbie,
Let me start by saying I have only ever bought three houses, so not so experienced.
You have not “done the wrong thing”, in my opinion, as you have not signed anything yet.
Your solicitor has me a little worried though. You put clauses in a contract so that you have the option to opt out. If you sign a contract that has a clause in it saying “subject to satisfactory building inspection” and you are not “satisfied” with the building inspection, you should have the right not to proceed.
Maybe the key point here is that you have not signed the contract and the building and pest inspection will have been carried out before you do. This might be what your solicitor is concerned about.Sue[
]“Be careful not to step on the flowers when you’re reaching for the stars”
I haven’t put in a written offer, only a verbal one.
The house is about 60 years old…I did budget for some various things with a house of that age, and offered what I thought was appropriate at the time. Obviously I’m not a pest inspector, so couldn’t tell whether there were termites in the body of the building, but looking over the property myself, I couldn’t see any termite damage. However there is masonite on the walls in the lounge room with wallpaper, so whether there is termite damage there, I am waiting for the inspector to let me know. My main concern is that the house hasn’t been tenanted for 5 months, and when I ran the water in the bathroom, the water was rusty. I took that into account with my offer, but now think there may actually be a blockage in the pipes from what the building inspector has told me. I just want to know if this is a negotiable point with the vendor.
Thanks for your help….I’m still a newbie at this game.jarmbie
How far from your house is this place? Are you able to easily get to this place to assist in getting quotes and doing a few things yourself to make the property more tenantable. Five months with no tenant is a red flag for me. No proper running water – Do you really think thats the only problem. Good Luck.
Hi Jarmbie and welcome to the forum.
I to have only ever bought 3 houses but every thing can be a negotiated point. One question I have for you tho, is your solicitor one that the agent uses to? I would recommend never to use the same solicitor as the agent recommends, even if cheaper, cos if both he vendor and purchaser use the same solicitor and then there is a conflict between them, the solicitor then has a conflict of interest.
Regards Bear
It’s a worst house/best street situation…..I also think the vendor was being greedy and originally asking too much for the property, but is now desperate to sell it. It’s not in that bad condition, just the few things I have mentioned. We are going to be doing a lot of the work on the place, I’m just curious to know the sequence of events that occur when you make an offer….I’ve only ever made offers on 3 properties before. One was for another property in the same area as this one, and the building inspector advised me not to buy it, so I do trust him on what he’s telling me. And no, my solicitor has not been recommended by the agent – I never use anyone recommended by the agent – i prefer to use my own research to find good people.
jarmbie, you can use anything to negotiate the price with the vendor. It depends whether or not they know about the problems, and have already factored them into your price though.
In negotiation, the other side could always say no. If they do, it’s then up to you to decide if you want the place, and at what price you are prepared to pay. If you don’t get what you want, don’t sign a contract, and the only money you lose will be that which you have spent on the inspections. You WILL get your $1000 back.
Ball’s in your court.
Cheers
MelHi There …. If you have only given verbal offer and all has been accepted then …. this is not binding at all. you can walk away if you choose. I would let hte RE know that you have issues on the property and have adjusted the pricing to cover your costs…… depending on how much the vendoer wants to sell you can try many techniques to get your win win situation. (These are just sugestions nad by no means advice)First you could: offer X les and stipulate what is wrong and how much you anticiate the repair cost to be.
or You could agree on the price on condition that the owner repairs at his/ her cost before settlement (pending suitable reinspection prior to settlement).
Pay the agreed price and in the offer write the ammount (you are intending to need to repair costs) of repair costs to be paid to your lawyer at settlement to cover your added costs.
Any way depends on how creative you can get…..
Cheers
Kiwi![8D]Giday jarmbie
just letting you know if you logon to http://www.metropole.com.au they have on offer a free Ebook called power negotiator.you will need to signup for the monthly newsletter to get the Ebook but i can tell you its worth it
from memory its about 20 pages full of great tips on negotiation.Cheers
Originally posted by Native_MetaL:
you will need to signup for the monthly newsletter to get the Ebook but i can tell you its worth it
from memory its about 20 pages full of great tips on negotiation.Sounds good.
When I subscribed, I was offered a bonus report (16 questions for all property investors).
But I can’t find anything on the website re the Ebook – is this mentioned in the newsletter?
Regards, Peter
It depends on the circumstances.
But you should NEVER spend a cent on inspections till they have signed your contract!, they have every right to sell the house to someone else at any time until they sign your contract offer.
On the subject of negotiating price after inspection etc, I sold a property for a good price to some investors from Sydney, I accepted thier offer straight away as I needed to sell the house in order to buy a block of land I was signed up on.
It was subject too etc but they came back with minor faults like louvres missing etc and wanted a $5000 discount!, I was annoyed as heck at the time and stressed and very nearly told them to go jump…seriously!.
Finally I relented and gave them a deduction of around $2000 which I was not happy at all about, they were being SMART, anyways the house sold for $143,000 which was a good profit for me and allowed me to get the land I wanted but now a few months down the track the house is worth $200,000, which I knew would be the case.
Moral of the story, it all depends on your circumstances and the extent of problems with the house.
If I were you I`d sign the written offer and put down $100 deposit, they will not entertain anything till you do that you might appear to be an opportunist.Jarmbie, I think it’s quite usual for there to be offer and acceptance but no contract signed. Often, inspections are done before a contract is signed now, and sometimes, because this time is given to the purchaser *before* signing a contract, the solicitor will ask you to waive the cooling off period once signed. So take your time and do what you have to beforehand. Also, you would never have to agree to a waiving of a cooling off period. In QLD, I don’t think they even have a cooling off period!
Jarmbie, being a hard negotiator is not everything. It depends on whether you want the house or not. $5000 off for discoloured tap water? You’re hoping for another 5k off after BIR? Depends on what you want to do. But if a vendor feels messed around by a purchaser, they might pull out too- that’s sometimes hte price of getting these reports- they come back unsatisfactory, and purchasers have to pull out of the deal. I know people who have lost a fortune on the price of the inspection reports- particularly when the sydney market was so heated.
It sounds like it could be a cat and mouse game with you and the vendor. If V wants to sell to you and you want to buy from V, then I am sure you both can negotiate it out. V wants to give you no discount, and you want a 5K discount… can you both live with a 2.5K discount? Build a relationship with the V. Then it’s easier to negotiate. But remember, noone wants to be told their place is a dump… so go gently
)kay henry
Kay there is a cooling off period in Qld, I think it was only bought in a couple of years ago.
As far as inspections why would you want to pay out for them and then find someone else has signed a contract?.
I would not blame a vendor for selling to someone else if there was no contract and no deposit.
What reason could you possibly have for not putting down a hundred dollars to keep everything in it`s rightful order?.[]markpatric
As for me, I’d just prefer to have inspections etc done before a contract is signed. I wasn’t referring to a deposit- i was discussing a contract. I guess I just feel that a contract is binding (in my mind- not legally) so I wouldn’t enter into it unless certain. I have also asked a RE about their attitude to gazumping. I think if a RE and vendor know a person is sincere, and wishes to buy, it wouldn’t be good for them either to mess around someone when it’s so close to a finalised sale.
kay henry
So are you saying you would give a deposit but not do the contract till the inspections are done?.
With regard to cooling off periods, I don`t see the point as you still have to pay a certain % if you use this clause(in Qld), unless the contract is unconditional most would use Finance or Building/pests reasons and get the deposit back in full anyhow?.I am saying I wouldn’t sign a contract until I had done inspections. I wouldn’t sign a contract until I was sure I was going to buy the property. I can;t be bothered doing and undoing paperwork. When I know I want something, I get it. Or I miss out- it’s just the way I operate. Usually, i develop a relatoinship with the RE anyway, and they’re happy to be a little patient because they know I’m on the level.
kay henry
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