Hi All,
At the moment we are in the process of selling an IP. About 6 weeeks ago we had a pest report done and it gave the all clear (except for two minor areas of damage that were inactive and present when we bought it in 1999). This report was done by a pest control company.
We agreed to a price with a purchasor and the contract quite reasonably is subject to pest and building reports. As we had our own done we were confident that all would be OK.
Just now the agent rang to tell us that the pest report came back indicating around 30k worth of termite damage. He continued to say that it was not all bad as the purchasor was still happy to go ahead with the sale provided that we split the cost and reduced the price by 15k.
I asked if it was unusual to have two conflicting pest reports in such a short period of time. The agent asked who did our report and when I named the pest control company he said that the purchasor had her report done by someone else who is licenced to do both building and pest reports and was more likely to be correct because my report was just done by a pest control company (who has been employed by us to do an inspection on the property on a yearly basis since we bought it).
My husband has called the company who did our report but the actual person who did it is not available to call back until tonight.
I thought about asking our solicitor to employ someone independent on our behalf who holds the same credentials as those of the purchasor’s inspector.
Could this be a scam? If it is for real why would the purchasor pay for half the repairs? We accepted her “final” offer which was rather low only because she also offered a 3 week settlement and this would have freed us up in time for another deal we are looking at. I just wonder why she is so ready and “happy” to pay 15k towards repairs when a week ago she was adament that she had made her final offer and not a cent more using the short settlement as a bargaining tool. I don’t like to assume that people are dishonest but alarm bells are ringing and I just feel that something is amiss in this situation.
We have licenced builders in our family who will help us repair the damage (?) for cost price but this will have to wait until January when they are on holidays. We are considering just taking it off the market and doing the repairs (?) then.
Does anyone care to share thier related thoughts and/or experiences with me?
Cheers
SonjaPS A copy of the purchasor’s report is being posted to me but she wants an answer today.
You have the right of refusal to the offer.
If your confident of your report or a 3rd report varifies your initial report then I think youll know what to do!
The purchaser also knows what he is prepared to pay and he maybe a keen negotiator!
You could do a subject to a 3rd independant report by X period say 21 days.If X then this price if Y then that!Arrange it through your Master Builders association (dont know what they are called in your state).
But if it was me Id be backing MY report/s.
If its proven wrong particularly when inspected once a year Id be pretty hostile to my pest controller—Id want answers and to recover costs.All this is best done by NEGOTIATION rather than Litagation!!That way you keep the solicitors fee and increase your negotiation skills.
Smile continuously and act like COLUMBO.
Humans are the DUMBEST of creatures.
They do the same thing day in day out and expect a DIFFERENT result.This is the thing with negotiations – you will never know. I guess you have three options.
Accept her offer and reduce by $15000.
Negotiate to something more acceptable.
Call her bluff and tell her the price agreed is final and that you will put it back on the market.
Is a hard call and I wouldn’t dream of advising what to do. I do know that some buyers try it on as a matter of practice fully intending to buy the property regardless.
Let us know what you decide and all the best,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.85%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Sonja,
Early this year when I bought a property. Pest control report was not very good but I still bought the proprety as I already getting the property for very good price. If purchaser didn’t write anything in contract about sharing the cost of damage ( in case of problem in building or pest report) they should not ask for it. Either they should buy or they should not. I think they been to Brad Sugars seminar but didn’t listen to him properly.
Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]NZ loans and pre approval from 7.99%
Ahhh the old push to settle quickly as long as they are seen to be doing you the favour!
Can’t your building family mambers do an evaluation, Right now? Shurely you would be able to find out where the damage is and have your family members give you their opinion!I am thinking that you are correct! They seem to be too pushy. Would the $15K less make a huge difference for you in regards to the new investment? Ignoring the posibility that they are scaming you, would loosing the next investment cost you more than the $15K is worth? Just weigh up the pros’n’cons before deciding.
Cheers
C@34
Hi sonja,
My advice would be to get a third report, view them and even give a copy the purchases solicitor so they can view and make a formal decision,
Sounds to me there taking you for a ride, then again the next property your going to purchase offer them the difference.
It all depends on your market is property moving quickly is it slow these are other factor’s to consider as well.
Your Call.
Cheers
Joseph Scarcella
prime real estate agents
property management specialists E: [email protected]As luck would have it our builder relos live about 7 hours drive from the property – not even a weekend trip to be fair. Although we could ask it of them.
Yes, we are scraping the bottom of the financial barrel and the 15k would mean that the deal we are thinking of is off… of course there are always others.
I guess it’s just a gut feeling I’v got that someone is trying to pull some sort of a scam on us. I’m trying not to get emotional about it and just tell her to stick the offer where the sun doesn’t shine. I don’t want to come off as being rude or unreasonable although that is how I feel ATM. This is why I’m waiting a while before I get back to the agent. I thought I’d make use of the time out and gather a bit of info and a few opinions as my experience is really quite limited. I have contacted the Master Builders Association and am waiting for a return call. Either way, we are not going to drop the price (as we are not convinced the 30k in repairs is legitimate. Even if it is, it would prove better value to take it off the market and wait ’till Jan when we can fix it with our relos together with some other minor repairs and reassess putting it back on the market then). I haven’t written off the idea of getting a third report either.
While we’d like to sell the house, it’s no great loss if it doesn’t happen – just a change of plans. I just wondered if others had experience and/or info with this or similar situations so thanks for the replies techa, Simon, PropertyGuRu, C@34 and collector j. I’ll give you an update when I’ve got an outcome.
Cheers
SonjaSounds like a scam. If you’ve had the pest control reports done every year tell them that you will happily provide them with the reports and that they can deal with your pest company. Another bargaining point is that you were prepared to buy the house with the existing damage and have been VERY careful *yearly inspections* which is more than most.
You have done the right thing – be confident in your decision.
The purchaser is just trying to reduce the price down. The vehicle for this happens to be
a) quick settlement
b) existing damage which can remain till the end of time without problems.This is quite common technique – I know someone who had a reduce price because of a damaged soffit board (1) which would have cost $300 to replace (including labour). The purchaser asked for a $300 reduction in price!
Remember also that the real estate agent is now acting for their interests and may try and pressure you into closing the deal and accepting the offer.
This is because they have a commission (almost) within their grasp and will work hard on the easiest party to condition them into a sale.
That party most probably is you at this point. Whatever your choice is – stick to your guns and don’t let anyone else put the guilts or pressure on you – it is YOUR house and your decision after all.
Thanks alwayscurious, I did get the impression that the agent wanted me to accept the offer. He actually said “I know what I would do…”
Anyway, 5 pm has come and gone and no word from him. The purchasor was meant to deliver her inspection report to him today so that he could forward it to us… but still waiting (not) with bated breath. From many different sources I get the general consensus that the purchasor is likely to be trying to take us for a bit of a ride.
Our pest inspector contacted me and said that he was quite familiar with the property (as he should be) and in his opinion, there is no work that actually requires attention although there are small areas of inactive damage in both one section of the roof and one section of the joist subfloor. These are long standing and not of any significant consequence. At best he suspects that the purchasor’s inspector has quoted a maximum amount to repair the greatest amount of damage possible. He suspects that she is hoping to reduce the price using this inflated and unrealistic quote and can not imagine how there could be anywhere near that amount of damage. He is also confident that there is no active termites. So…
I’m now waiting to hear from the agent again or to see this report that is supposed to show up in the mail…
I’ll keep you updated.
Cheers
SonjaIt looks like a scam to me. If I found 30k worth of pest damage I would be asking for a 30k reduction.
Obviously a 3rd independant report is needed here.
Cheers
kel
Kelvin J Brennan
Ditto to what everyone else has said really.
You can’t go past an independent report. Don’t explain the situation to the pest inspector (you don’t want to induce bias) just try to arrange for it to be done ASAP.
And don’t cave in to these people if they are applying the pressure in bucketloads. If you sell your house to people who are taking advantage of you it will P*** you off forever! Not that we want to get emotional about these things but at the end of the day, who wants to give a good deal to someone who has no hesitation in manipulating you?
You need to also consider what to do if an independent report comes back confirming that there is in fact substantial damage. If this is the case, is the price reduction suggested by the purchaser reasonable?
Good luck and keep us posted.
Cheers,
Ali G
Thanks for all the replies, the only news so far is that our very accomodating builder relos have offered to go down there next weekend and see what all the fuss is about. They will give it a very careful inspection and give us a very honest conclusion. If necessary we will then employ an independent inspector from out of town to write up that third report. This is all assuming that the purchasor delivers that damning report that she has been talking about…
I’ll keep you all updated.
Cheers
SonjaPS I know the contact details of the inspector that the purchasor is using but thought it best not to contact him myself. Any thoughts on this?
PPS Ali G the seeds of doubt are well and truly planted in my mind and I am terrified that the house may have become termite fodder despite our best attempts at taking protective action since buying it. I’m just hoping and praying that the pest guy that has been looking after it has done a good job and knows what he is doing and talking about. He is licenced but that is not always a garuntee I guess. Ironic that he was appointed by our PM at the same agency as the agent who is selling it.
Goodmorning All,
Here is the promised update…
Our relos enjoyed a weekend away and checked out our house while they were there. The verdict is basically the same as our original inspection. There is a very small amount of old/inactive damage that is in no way significant enough to warrant any repairs.
There is a bit of movement in one (and only one) of the floorboards in the kitchen but from undrneath the house it can be seen that it is not glued (they glue those things?) properly and can be fixed with a nail.
Apart from that the outside could do with a bit of cleaning and a coat of paint, the carpet is a bit ratty (bush rats got in and chewed it about a year ago while the tenant was on holidays) but basically everything is fine and they would buy it if they wanted to move there.
So, a bit of relief and now a decision on what to do next as there are no longer any interested buyers (I guess word gets around?). We are wondering if we should just take it off the market, fix it up a bit and perhaps sell later. BTW it is rather near Merimbula which has been mentioned in a recent thread here. Any growth there would have to be good for us
Cheers
SonjaKelbren wrote:
It looks like a scam to me. If I found 30k worth of pest damage I would be asking for a 30k reduction.
For me, this would be the loudest signal telling me it’s a scam. The most obvious. Knock the purchaser back without any remorse, you’ll find an honest buyer.
Karl and Rita.
The only thing that limits us…is a limiting belief.
I would just add that one of the first rules of negotiating is to ask for more than you believe the seller will give you. Then you can concede something that you didn’t really expect to get, and end up with exactly what you really wanted.
In this scenario, I suspect your buyers wanted $15K off the price, so told you the estimate to repair was $30K but that they would meet you halfway. This makes them look like good guys, yet had you agreed they would have ended up with the $15K they wanted all along. It could also explain why they did not produce a copy of the pest report for you to look at.
cheers, investorgirl
It sounds like it is a bit late now, but what I would have done straight away, is asked for either the report, or the company they had the report done through.
That way you have options, you will know where the damage is, what sort of damage, and you can also get quotes from repairers… You can also easily find out if it is false information.
If they don’t want to hand over the report, it is most likely false.
If they do hand over the report, you might find it will only cost $5k to repair, and you can give that offer to them.
So that would have been my option: To simply say, the report we had done shows no damage, can we please get a copy of your report. There is no reason (unless it’s a scam) that they will not show you the report.
Thanks for all the interest in my problem.
I’ve been away for a bit over a week now and have just started to catch up on what I’ve missed here.
Eventually we did get a copy of the report and it didn’t indicate a price to fix any damage. It was also hard to figure from the report how anyone could come up with that figure. A lot of it was apparently word of mouth between the inspector and the prospective purchasor.
Either way we have the peace of mind that our relos have had a look, said they’d be happy to buy it and do nothing but paint and clean.
Just so that the thread has a bit of closure, we have decided that there are a lot of ways to add value to the property (without too much time, $$$ and effort), most of which will also increase the rental return. This is the course of action that we have dedided on for now. Our PM agrees that even without any improvements there is room for about a $10 – 15p/w increase in rent when the existing tenant moves out (some time in December probably). So it will go close to +ve CF without even doing a thing.
Once again, many thanks to all
Cheers
Sonja
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