my father has a property under contract which was to go unconditional today but I got a phone call from the agent telling me of a hiccup. My father is away so no decision was made. Actually the agent had been trying to ring my father or me for the last couple of days but been unable to reach us.
It seems there is a prob with the pest and building inspections. The agent told me there are active white ants all thro one units bathroom. Also the footings all need replacing according to bldg inspection. All this (the agent tells me) would ordinarily cost 20k but as the buyer is a builder he says he can do the work far more cheaply. He wants 10k off the originally agreed upon price.
I have this niggling feeling at back of my mind. This buyer made a rediculously low offer initially. He is obviously a practiced investor. (I wonder if he is reading this now) Anyways I just have a feeling taht this guy is trying it on.
Can we ask to view these pest and building inspections? Has anyone experienced this kind of thing? I dont know about the legalities but I know it’s not ethical. I am thinking to arrange our own building inspection. If you have bldg inspection on yr own IP, is it tax deductable?
thanks for your time. I really appreciate the advice and tips I gain from this site
Milly
For potentially 10 thousand bucks difference, I would get someone around to quote on repairing the whiteant damage. You will find out quick enough whether there is damage, and if so, how much it would cost to repair.
But that depends on how desperate your father is to sell. If this is the only offer that has come along, you may be best to just take the new lesser offer, but if you think the property is worth more and your father is happy to hold out, then tell the purchaser to take a running jump.
I’d be interested to hear how you go.
Cheers
K
I’ve been in this situation before, both as the seller and the buyer.
As the buyer I played it up for all it was worth a got a sizeable chunk off the agreed price.
As the seller, I told the buyer that we already knew about it and that is the reason we agreed on such a low price. We were happy to rectify, cost estimate was 5K, but we told the buyer with time and us fluffing around repairing the damage, it would add another 15K onto the price. The buyer signed off and the contract was then unconditional.
IMO these building and white ant reports are walk away decision points…you either release the clause on the contract or they allow you to tear the contract up and walk away.
What they do not allow you to do is negotiate price. Tell the buyer to stick the report up his jumper.
Just out of curiosity, what % of value is the construction worth ?? IMO it depends very much on this.
i.e. Purchase price 200K, land value 170K…buyer is after the site and talking about white ants is a smoke screen. Purchase price 200K, land value 80K…buyer is after the construction and talking about white ants is important.
Just my thoughts…
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
I think there was also a promoter “promoting” this type of deal for the buyer..as a seller, check it out- it should only cost about $200 for an independant inspection report if you so desire..
getting a few quotes may cost you zilch and show what real damage is there..
Dazzling as usual IMHO is pretty spot on re his thoughts..
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHi Milly,
Been there done that.
Lady buying the property had an inspection done that apparently found 30k worth of damage and she was willing to split the difference and take 15k off the already negotiated and agreed upon price.
Lucky for us we have relos who are builders and were willing to drive 3 hrs to find the truth of the matter. No active termites and no structural damage. There was evidence of previous termite activity but any structural damage that may have occured was repaired – evident by sections of replaced timber. It was this way when we bought it so happened more than 7 years ago.
I’d get a second inspection and quote to fix damage (if any).
When I posted about it I was told the same thing that redwing has said here… a particular person was promoting this as a buying strategy. I’d like to know who the promoter is.
Good luck with it
SonjaMilly , I’m assuming that you are in QLD.
You don’t mention if the buyer terminated the contract.
Firstly, if the contract is subject to P&B and an Inspection date is specified on the contract, then if the buyer did not terminate the contract before 5 pm on that date, then it goes unconditional, regardless of further negotiations. It’s up to the buyer to terminate it.
Secondly, yes, if you ask for the buyers for a copy of the report, they must provide it without delay.If they did terminate the contract, get a copy of there report anyway. 20k in damage, did they tear the wall lining away, to check the true extent ?? Did the seller do the inspection and quote themselves ? The Inspector must also be qualified and hold a current licence.
Hope you have a solicitor!! If the buyer hasn’t walked away, then the ball is still in your court. I think you can claim the expenses of your own inspections and quotes for repairs involved in selling the property. Not sure if they are expensed or form part if the cost base.
Mal
Getting out of your comfort zone, can help you become comfortable
Regarding whether or not you can have a copy of the report… when we were selling our PPOR (nine years ago) our buyers had a building inspection done which showed white ant damage to three stumps which would need replacing (NOT active, but prior damage). They wanted a reduced price. Our solicitor advised that because the sale contract did not state that we required a copy of the building report should there be a problem, buyers solicitor was objiged only to quote portions of the report in a letter, which is what we got, a very incomplete snapshot.
Buyer’s solicitor was family member and a tad power mad and extremely rude to our solicitor. He caused us so much angst. I caught sight of him with our buyers months after the sale at an auction that he missed out on (sweet justice!!).
Anyway, whether it was right or not, we were not permitted a copy of the building report. I suspect that it was because the three stumps were the only problem in a house that was lovingly renovated (we had intended being there for ever and had not cut ANY corners).
Last house we sold to young couple, very nervous. Building report stated “water damage evident” under bathroom. They wanted us to reduce the price as well. We had someone look at it. Water damage was probably over 20 years ago. New bathroom had gone in since then. The problem with building inspections is that depending on how they are worded it can mean the naive buyer running a mile (sometimes without any reason) or the seasoned buyer trying one on.
I have little time for most of the building inspectors I have dealt with.
My lesson for any future sales is that I would add to a contract that should there be a problem with the building report, we require a full copy. Better yet, I think if I was to sell now I would get my own building inspection done so there are no nasty surprises.
My thoughts, Wylie.
Originally posted by Dazzling:As the buyer I played it up for all it was worth a got a sizeable chunk off the agreed price.
As the seller, I told the buyer that we already knew about it and that is the reason we agreed on such a low price.
Hi Dazz,
When you were selling, did you actually know about the repairs required or were you bluffing? Must say, it’s a great move either way- if you’re bluffing he can’t call it or it makes him look like a liar!
Milly, in the end it all depends on how much this buyer wants your property. From my impression of this scenario, it seems like he is making a last attempt to take a little bit more off the price- I don’t think he will walk away if it’s already at a “ridiculously low price”.
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