Good morning all,
I have or am in the final throws of my first purchase. I am happy with the house, there are veryvery few issues with it! I did the research and put in the necessary clauses:-
1. Subject to a satisfactory building inspection.
2. Subject to a satisfactory Pest Inspection.
3. Subject to a satisfactory A/C Inspection.NO dramas there (pretty standard in WA), BUT the Pest inspection indicated that there are two bushes with serious Termite investations that need to be erradicated soon. They are both on the property fence line but what bugged me was that I was told by the REA that: “These (the bushes) are not part of the building/structures (like sheds, etc) and therefore not of the current owners responsibility!” Is that true???
Then the A/C Inspection mentioned that the A/C filter needs replacing ASAP and that both belts (it’s an outside ducted A/C unit) need urgent replacements. BUT because the report said:”The A/C is in good running order for its age…., the REA said to me, you guessed it:”The Inspection report said that the unit is in good running order and therefore the filter and the belts are not the current owners responsibility!“Is that true???
I want the house anyway as it is in a realy good condition and has lots of other benefits/aspects that make it a valuable purchase, but I feel that I might be cheated in a way here!
Please correct me if I am wrong! BUt if I’m not, then I will need to have words with this REA.
Thanx all.Cheers
C@34
Dont sweat the small stuff.
They dont sound like show stoppers to me. You can fix surely after you purchase.
calvin,
If you’ve already negotiated on the price, then think about the inspections and the price you’ve paid. I negotiated on a property, then got inspections done, found a few small problems, but then thought that I’d already negotiated price, so I was happy not to worry about the other small. cosmetic stuff. Depends on how you want to play it.
Re the specifics.. termites in the bushes? Chop them down.
Re the aircon… if it is working well, then why worry? You’ve been told it is in good nick for its age.. so I guess you can’t expect it to work like it did when it was first installed.
I wouldn’t worry about those things. If you like the house and you’ve already negotiated a deal that you feel comfortable with, the bushes and the aircon will be the least of your troubles.
kay henry
Yack, Kay Henry,
both of you sound like my wife (a good thing in my eyes).
I guess you’re right, not too shure what I was expecting. I would like to be BETTER next time I buy a house! So knowing the true facts on the Laws would be an advantage. I feel a bit blind-sighted by the REA. It allmost feels like he humoured me by taking these clauses.Made me feel stoopid – there you go. I’m not just a piece of meat! I have feelings and emotions, you know….. ooops, wrong forum, sorry.
My reason for asking you is to see if putting these clauses in is just another avenue to escape a purchase or whether they actually hold any water!? Should these things be done before the final price is agreed upon? When do you do your inspections? During negotiations, after, when ?
Cheers
C@34
Firstly, do not beleive anything a real estate agent says, and don’t take legal advice from them, talk to your solicitor.
I agree with the others, these are only very minor things. How much would it cost to replace the belts in the air con? get a pest guy in for the bush – probably $200 to fix both, you solicitor would charge you more to answer your questions.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
calvin,
Seems like you’ve done ok. Sometimes anyone can try and make people feel stupid. RE’s, property investors- hehe. I wouldn’t worry about it. I do have a bit of a rule for me… if someone patronises me- a RE agent, for example, I won’t bother with the property. There’s too many properties around, and it’s too big a purchase, to feel bad about the person you’re dealing with. Interpersonal dealings with people, is crucial to me. If they act mean, they lose the sale with me- period.
Re your questions:
“My reason for asking you is to see if putting these clauses in is just another avenue to escape a purchase or whether they actually hold any water!? Should these things be done before the final price is agreed upon? When do you do your inspections? During negotiations, after, when ?”
When I have a BPI done, I guess I am thinking more about the structure of the building. That is what is going to cause me big trouble in the future. Any small cosmetic problem doesn;t hit me emotionally. It depends on what type of person you are. I’m not a perfectionist so I don’t worry about a tile being out of its grout or a pipe needing to be painted. I use the BPI as a tool to know about the house really. Unless the termites are playing in the house, I would just shoo them away with an axe.
You CAN negotiate a new price after a BPI- that’s legal. I have felt better deliberately NOT negotiating a new price after BPI- as I said, I already negotiated a price… and for no other reason, except that I was negotiating. So if you already got 10% of the price, or whatever, is that enough? Do you need to pull it down by another $360?
I do inspections after an offer and acceptance. I would see no point in doing them before, because someone else may offer and be accepted, and then I am wasting my money. O&A is my first step in the process, but I don;t do it unless I have asked several questions about the property beforehand. If I know the property well enough beforehand, sometimes I even don’t bother with the BPI.
This is what I’ve done:
Unit 1: No BPI as I knew the property really well- had beenseeking one in that location for a while.
Unit 2: Did a BPI- minor issues, nothing structural, did not renegotiate after BPI.
Unit 3: No BPI, but a BC paper search (this in itself cost me $300). I had known and kept an eye on that building for 3 years since it was built, so I knew it anyway).
Calvin, there’s no hard and fast rule on these things. You can offer a new lower price due to the BPI, but the owner can also say no, and sell it to someone else who doesn’t renegotiate. It’s up to you.
kay henry
HAve you made a offer on the house, if not make it subject to those things being done, its not up to the realestate agent to decide, ask him to put the offer to the owner.
Thats my 10 cents worth, or if you have allready made a offer at a lower price and they have accepted then I would just buy it and spend the money to fix the Aircon and also to have the whole place sprayed for termites as well as the removal of the bushes
Chris[baaa]
I usually get a building inspection done before I do an offer. That way I can negiotiate a price. But first I get my dad or brother to look – they are in the trade and can spot things I cannot. As Kay says I am more interested in structural/major problems.
I remember when I first bought my place about 10 yrs ago now. I was shit scared. I felt intimidated by agents.
Now after buying a few places and having read Jenmans books – i know what to expect from agents.
Now I take the piss out of them – even jenman agents.
“why do i need to pay for advertising your business when I want to sell, why are they selling?, thats too much you’ve overstated the selling price to the vendors, gee theres alot of people here looking at the place – any offers? No. Well you better go condition the vendor – they want too much. I love to use the word ‘condition’ – you can see there eyes light up – hey – I learnt that in my latest REIV course.
I have even got a few to laugh with the word condition.
When you put those clauses in your contracts always specify to the PURCHASERS satisfaction. By just saying a satisfactory building report, termite inspection etc you are leaving a lot of room for subjectivity and argument. If your clause says; subject to a building report deemed satisfactory by the purcahser or something like that (cant quite remember how I word it), the ball will always be in your court.
J-Rock
J-Rock beat me to it – That is exactly what I was going to say.
All the people who run around asying put a ‘subject to finance’ clause either don’t fully know what they are talking about or are making a generalisation.
Don’t let the agent write the clause on the contract – get the clauses sent from your solicitor… Then have the agent photo copy the fax, cut out the conditions and paste them onto the contract.
Assuming you have a competent solicitor and have clearly communicated what you want to him then you will NEVER have a problem with agents giving you their legal opinion on the worth of a condition.
Cheers,
GregAgree with J-Rock, in fact there’s a great thread called “subject to…” in this forum (Check it out)
As for the Terror-mites, don’t worry unless there in the house itself, have a friend who owns a Pest Company and you’d be suprised how many termites are around, they love the damp soil also, plus, you can always have a termite free yard and two weeks later, thier there…don’t let a great deal hinge on termites in the bush..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorThanx all for your comments,
some took the focus of my worries, some were helpful.
The house is a good buy, so I’m not going to ‘sweat the small stuff’.
To tell you the truth, I believe that I actually put “to the purchasers satisfaction’ on the individual clauses! I’d have to go back and check! First real purchase and I’m all giddy. Wots that about no emotions?
As this is to be our PPOR and my wife has given it her stamp of aproval (and she’s keen to move in) I wont be rocking the boat. As for future investments, I’m going to have to be more on-the-ball. Should I be in the same situation then, well, they’ll have to come to the party. I haven’t repeated a mistake yet!I heard it will get easier as time goes on.
Cheers
C@34
All bs from agents is to be treated as suspect at the best of times. If vendor owns property get a quote on a full termite barrier, not just a spray and kill on the property around all building areas. This usually includes a kill of active termites anyway.
I personally had this in my first IP in Qld in Dec 2001. One tree was infected all buildings ok. Got a quote of $1320 for termite barrier and that cam off the purchase price or it was a no sale.
Owner, who is resposible(bloody agents), copped that one on the chin. Yours may say no way, so then you offer less on the property allowing for the cost or you walk away. In the current market not too many sellers wont budge as it is a buyers market.
Go get em.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
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