Hi guys i am in the process of buying a IP in Footcsray i had the building and pest done today, being built in the 1940's the house needs restumping and the boards polished, new guttering, rewired. The inspector also said there could be termites in a small section of a wall but it also could be ants he had a hand held meter that detects movement but short of cutting a hole in the wall we wont know,(assume its termites) the next door neighbour has done some excavating and in the process dug up the old storm water pipe so he has replaced it with pvc but it would be less than 100mm from the surface and with no fall. He has also tapped into it to facilitate draininge of one of his downpipes as its right on the boundry, is this legal?? We have signed a contract of sale subject to Building and pest and some other conditions now i would like the owners of the property to fix the problems or reduce the price what do you guys think the best way to go about it would be?
Hi James,
I would get quotes for the work and look to reduce the price. Most vendors don't want to be bothered with repairs unless they're minor.
Good luck
Carlin
Hi James07,
Thanks for making your post. Sounds like an interesting deal, and well done on your due diligence to date.
Termites are always an interesting issue. Most people think a house with termites is like an investing death sentence, but really, it's just a cost to get fixed. You've done the research and have identified the problem, the next step is to factor in the repair cost on a worst case scenario and factor that into your number crunching.
I'm not sure about the legality of your neighbour's actions. It would be wise to have a plumber inspect this and give you an opinion. Should damage eventuate, I doubt insurance policies would provide coverage if illegal plumbing is identified as the cause.
Now, as for your offer, here's what I'd do
1. Get a written quote for fixing the termites, and other works required to make the property liveable.
2. Present these written quotes to the real estate agent, and suggest you would be happy if proceed with the purchase if 100% of those costs are deducted from the sales price.
3. Negotiate up to the price you are willing to pay if Step 2 is unsuccessful.Hope this helps.
Thanks again for your post. Happy new year.
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Thanks for the replies Carlin and Steve, i will get some quotes ASAP the house is unoccupied and the vendor has never lived in it so i dont think they will want to fix any of the problems so a reduction in price will hopefully resolve the issues. The house also has rubbish left through out the property old fridge, old bed, clothes, food in the kitchen from the previous tennants so i asked the agent to put in a removal of rubbish clause, but he was reluctant saying that normaly people clean up their house prior to the final inspection and that he had never had to put that in, and that the more clauses i put in the less likely the vendors will sign, and that there are other people interested. I said to him if he can persoanlly guarantee the removal of the rubbish then thats fine, he said he couldnt so i said then put it in the contract and if they dont want to do it we can reduce the price. I would have to say basesd on what i've seen so far they will try very hard to keep the price where it is and bluff me by saying someone else is offering more etc even though it is fair market value if not slightly higher so i'll have to hold my nerve and throw it back on them. We have signed the contract of sale but the vendors are yet to should be signed by today. after they have signed i will take them the building and pest report.
Keep us in the loop with what happens!
The idea of using the inspection report to negotiate a lower price has wroked well for me. This is because you have a valid reason for asking for a lower price, rather than seeming to be greedy or opportunistic.
All the best,
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
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