ive just gotten back the building report at our place in ceduna that is under contract. there was a few costly items that need fixing – totalling $14,000 for the whole thing. keep in mind these arent aesthetic renos like new carpet/paint, these are just items that need amending. if I could get reactions on prices that would be good thanks. I am in the process of finding another builder so they can give me another quote so i can compare. But this is what they had to say:
- Roof – corrugated iron has been painted red and is corroding at rider line under ridge capping all at sheet end laps. With the roof painted this will extend the life of roofing iron for a possible 4 years. Alternatively, the cost to replace roof and gutters would be around $7.000.
- Front corner external sheeting – the rotted base board would be about $150 to replace.
- Rotted timber frame work under tank would be about $1,500 but removal of the galvanised tank will disturb bottom and as this may be rusted due to sweating and age it may be necessary to get a new tank which is around $2,000.
- The dampness to bathroom wall is no doubt a result of poor sealing of wet area when the house was built. To rectify it would need to see removal of a row of wall tiles and floor tiles to shower and a certified water stop sealant to wall and floor then new tiles laid this could cost around $1,500.
- Smoke alarm may only require a new battery, $50.
- Fibre glass liners for baths are available to fix this $1000. (I dont know why they didnt just quote me for a new bath for around $500??
- Taps and shower head $200. adjust door $50
- Dual flush toilet cistern may only require new washers $30
- Remove drummy floor tiles from laundry and relay with bondcrete under $100.
I must admit, we are getting an older house – built in the late 60s – so i knew it would need work. and we are getting a very good price for it – we are paying $150k so its slightly under market price already for the area. so its a cheap house. the house was originally listed at $180k. but with possibly $14,000 worth of fixing I was wondering if I see if the vendor is keen on altering the contract price? I wasnt mind buying a cheap house under the knowledge that it will need some work. but a new roof, new tank, faulty bathroom …. they are quite major expenses.
would I be crazy if I came back to the vendor asking for a $10,000 drop in price to help cover these major expenses? the vendor is really desperate to sell because they have moved towns and need the money to purchase the new house they are buying. maybe that would make them easier to sway into a big drop in price? cos they want it sold asap.
I assume its not too late just cos we have signed the contract and the building report came back the way it did. the cooling off period still has another 4 days left also.
thanks so much for your experience and advice
Wow does sound like a lot of work.
In the current market i would be wanting to have got the property for a complete steal to be undertaking such work for 10% less than the purchase price.
I think i would be getting your Solicitor to say that given the work (and you can always provide them with a copy of the Building Inspection) you will make a new offer of XYZ or terminate the contract.
If the Vendor has been desparate to sell then he will listen to new offers.
Every other buyer is going to be in the same position on receipt of their Building Inspection.
Richard Taylor | Australia's leading private lender
Your contract should be subject to your satisfaction with the building and pest inspection reports. If so, you should be able to get out of the contract validly due to this clause. (at least that's how it works where i live)
So, if you can get out of the contract, I would definetely terminate the contract and make a second offer, even offering a copy of the building inspection report to support your actions. And I wouldn't stop at $10K – make the reoffer equal to your current offer less at least the total cost of repairs.
S
see thats the thing – its already the cheapest house for sale in ceduna. the valuation is getting done early this week so I will know exactly what its valued at then.
the only cheaper house in ceduna is 40 years older and its under contract – so no longer avail.
with a drop already of $30k from the original listing price of $180k (although I found it after it had already dropped to $159k) maybe its too much asking for even more off.
its just that when i was making my first offers i didnt realise there was that much work. so maybe in the vendors mind they have already dropped the price due to the renovations needing to take place.
i guess there is no hurt in asking? but if they say no, ive turned a $150k investment into a $165k investment and im not sure that I want to spend that much.
ill talk to the real estate agent on monday and forward them the cost of renos. It wont hurt to ask, they may even budge just a little bit on the price. hubby is saying he doesnt want to buy it unless its $140k ….. but i cant see them accepting that considering its a 25% drop from their first listing price
my first offer will be them covering the entire cost of the renos and see what they come back to me with
Hi Karen,
It's not in your interests to think up all the reasons why the seller won't renegotiate the deal. Don't be sympathetic to them. As Richard said, every other buyer who gets the building inspection report is likely to react in this way. It is an excellent basis to get a better deal. Now's the time to put on your big girl panties and nail a good deal.
Good luck
SLOL big girl panties … ill let u know how i go
ok i put on the panties and stepped up the mark. they refused to budge on the contract price at all and so we have sent written confirmation that we will be withdrawing from the contract due to unsatisfactory building inspection.
Im a bit disappointed because this Ceduna saga had been ongoing for weeks – with research, more research … and even more research … then finding the house and getting the contract going. I am out of only $1000 when combining the pest/building/solicitor expenses.
at least the valuation hadnt been done yet cos that was another $550 due to travel to the location!!!!
the losses could have been alot worse if we had bought the house because we really feel that it wasnt worth the price considering the expenses.
u watch …. i bet Ceduna rises in value and in 5 years time I look back and see that my $150k (plus $15k repair) house is now worth $300k+. LOL. But the purchase is just way out of my comfort zone for only my 2nd IP and its in a town I dont know. too much of a risk for me with it being Ceduna … Mine or no mine.
I hope I did the right thing.
Karen.
Good call, well done. They may come back to you. Let them contact you though. Go off the boil.
Very unlikely that the house will be worth 300K in a few years time. Possible, unlikely. All you can ever do is make the best decision TODAY. You don't have a crystal ball. If the investment is outside your comfort zone, then it's not for you. You did the right thing for you TODAY. You are not in a position to gamble with your $150K, you need a little more security. Time will come soon enough for risky, speculative investments. Even if they do sell this house to someone else, don't feel like you've missed out, feel like the vendor finally found the sucker that you weren't prepared to be. Walking away from a deal is hard, but sometimes it is just the best idea.
Sever since i pulled out ive had a real feeling of peace about the whole situation
so im very secure in the knowledge that Ive done the right thing for us at the momentplus how could u be in a bad mood when 3 hours u drop out of the contract ur hubby to rings to let you know he's had promotion and payrise!! today is a great day!
The whole thing reminds me very much of a deal I terminated, despite desperately wanting it all to work, and despite alot of work and a few thousand $ I had poured into it. When I terminated the contract, I felt immense relief. Turns out it WAS the right thing to do. Continuing with that deal could have cost us alot. I terminated the contract on grounds of disatisfaction with the buidling inspection – the lynch pin being a leaking roof and damage to the ceiling and timber within the roof. This was a $500K deal, though with 3 houses and we planned on reconfiguring the land to yield 2 – 3 extra blocks. Glad you had a good day.
Syeah it was like that for us when we found out about the repairs. when we were reading the building report our heart sunk at all the work. we really had our sights set on this prop. but oh well.
wasnt meant to be.Hi,
Just want to mention that with that list of repairs, I would be factoring an extra 2 weeks + 10% costs in case things 'go worth' (murphy's law)
good work and congrats on getting out!
Ken
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