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Building Inspection - What would you do

Discussion in 'General Property Chat' started by Big Will, 26th Jul, 2016.

?

I would

  1. Proceed at contract price

  2. Ask for a reduction of 0-25k (meet the owner 1/2)

  3. Ask for a reduction of 50k (cost)

  4. Ask for a reduction of 50k-75k (cost + other costs)

  5. Ask for a reduction of 75k+ (please comment why and how much)

  6. Walk away

  7. RUN away!

Results are only viewable after voting.
  1. Big Will

    Big Will Well-Known Member

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    Hi All,

    This is a real scenario as some people on the forums will know.

    After what the forum thinks they would do facing the situation we are in.

    Signed a contract subject to building & pest, which I am upset it has come back with something but at the same time it is good as we are now well aware of the issues. Everything else about the property is good if not great and ticks all the other boxes that I (for poll you) would want.

    All up we are looking at 50k to fix the issues the building inspector identified the biggest being underpinning ~30k. This cost is not including holding/loss of rent or any contingency. This is reflected as about 10% of the property value.

    Vote on the poll, will be interested in peoples thoughts as a starting point and make comments if you feel to or if it required.

    Thanking all in advanced.
     
  2. Agent99

    Agent99 Well-Known Member

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    My experience with most building inspectors is that the majority have no clue and generally dont have a trade background. They tend to simply tick a box and then have a paragraph for each tick weasleing their way out so they cant take the blame for their dodgy report. Having said that there are a few that do take their work seriously and do know what they are talking about.
    Of several reports we have had over time 1. indicated rusted pipes....he was a little stunned when I rang and told him they were copper :rolleyes: 2. While I was there he said shower floor had no fall.....when I looked at his level the bubble was actually split into two so I turned it around to get a full bubble again...his reply didnt know you could do that...Doh:eek:
     
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  3. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Request 50-75k reduction so you have room to negotiate. If you can't agree on a final amount that you think the deal still make sense for you , then walk away. Might want to get an opinion from a builder too.
     
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  4. Big Will

    Big Will Well-Known Member

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    I didn't add this is a well recommended building inspector that has done numerous properties for people here on PC. This is my first time using him though.

    But I also agree there are some cowboys out there I would hope that PC hasn't been using cowboys and the price is what I would expect from the more qualified building inspectors.
     
  5. bob shovel

    bob shovel Well-Known Member

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    Your cowboy might be different to my definition of cowboy.
    One bad day or nasty hangover can change a report!

    I said 75k+ but would make some calls about the underpinning and then readjust.

    If it was 30k and 50k all up id put 20% on top for extras and then 2k holding and some more for your time to arrange the work etc. Thats up to 65k.

    The would be giving a general price of 30k but that house may have something an underpinning dude will see and that it's 40k or just demolish it.
    There's a bit of risk so that's why I'd go higher.
     
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  6. citystar

    citystar Well-Known Member

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    Give me a large fire in the kitchen that burnt out a section of the roof or termites any day over structural damage. It could end up like an onion, as you peel layer by layer and repair one issue, another is found that you were not able to negotiate/factor into the purchase price. I would make them think I was going to demolish the house and offer them the value of the land. If they accept, repair the issue with a nice amount of equity, If they didn't bite, I'd walk away and use the deposit for a project that was less risky.
     
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  7. willair

    willair Well-Known Member Premium Member

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    The vendors would know about the problem's,30k to fix one problem and 20 k to fix the others,so maybe they may not drop on the price they just want to unload a problem onto the next person..
    Good you paid someone ,something like this with a fix up turn around time
    plus what ever you find along the way
    may be just better to walk ..imho..
     
    Big Will likes this.
  8. barnes

    barnes Well-Known Member

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    One of the reasons why buying of the plan makes a lot of sense, no nasty surprises from within the property.
     
  9. dabbler

    dabbler Well-Known Member

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    Not at all, often problems arise and then your fighting the builder or insurer/s.
     
  10. Bondi

    Bondi Member

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    Definitely get a second opinion either from another building inspector or a builder. Have you asked the sellers to rectify the issue?
     
    Big Will likes this.
  11. Big Will

    Big Will Well-Known Member

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    At present we are waiting back on the engineer's report.

    I have considered the seller to rectify the issue but my issues with it are;

    1. Does the seller have sufficient funds to outlay 50k in costs?
    2. The vendor is located interstate, do they want to take on this project remotely?
    3. We will likely have different levels/standard of fixes, for me this is long term investment so I would want a long term solution as the vendor is offloading the property they may wish to do a quick/temp fix.

    This is why my preference would be to do the work myself otherwise if it was up to them to rectify I would want to have it to my standard, which would make the contract not secure for them as I could say nope.
     
  12. Big Will

    Big Will Well-Known Member

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    No offense but I completely disagree with you.

    When buying existing you know of the issues upfront and can see the issues.

    Buying OTP you are not aware of the issues and further you cant even see what you are buying. I think OTP is far riskier than buying an existing dwelling.

    Maybe read some OTP threads and articles to get a bit more of an understanding of where I am coming from.
     
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  13. Phase2

    Phase2 Well-Known Member

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    If I really liked the property, I'd go straight back to the vendor and let them know the disappointing outcome of the report. Tell them that for the deal to priyou want the cost of the repairs discounted from your offered price, that you will organise some quotes for the repairs so that both parties can agree on a discounted price for the property. Not sure how the finance/property valuation is affected in this situation. Valuation needs to be purchase price + cost of repairs?

    Probably also worth asking the engineer if it's a common problem with the soil type in the area, ie are you likely to have to do these repairs again?
     
  14. barnes

    barnes Well-Known Member

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    Everything is possible. But I never experienced any MAJOR issues with buying OTP, like the one you are facing. As an ex builder myself I know a lot on construction but only If I see it, and when it's covered even my experience is not always handy. :(
     
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  15. Leo2413

    Leo2413 Well-Known Member Premium Member

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    HI @Big Will it's more likely if they come to the table they will just agree to a price reduction and leave it to you to sort out the issues. Most people don't have that kind of money to just spend so it would most likely be coming off the contract price imo. Good luck mate.
     
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  16. bob shovel

    bob shovel Well-Known Member

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    True dat.
    I looked at an underpinning problem child once. I asked if the owner would take care of it and they just wanted it gone. I followed it up and a local builder bought it who was confident to take the risk.

    The works may even come in less which someone in the know could more confidently put in a lower offer than you
     
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  17. Big Will

    Big Will Well-Known Member

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    Thanks Leo,

    I agree that is why I put it as number one issue of getting the vendor to do it.

    Much appreciated our private conversation.
     
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  18. Bondi

    Bondi Member

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    Be very mindful of the time frames you have to get this sorted within your contract. From memory the seller has 5 business days to agree to fix the problem once given the building report. If they refuse to fix it, you have five business days to terminate the contract.
     
  19. Big Will

    Big Will Well-Known Member

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    Don't know where you get this 5 business days from, maybe it is something from WA.

    The vendor is aware of the issue and has been provided with the issues and we are working through the process together (for now at least). We still have a number of weeks before the building clause needs to be done and we will ask for extension if it is still lagging and if it is not granted it makes our decision very easy (terminate).

    upload_2016-7-28_9-33-53.png
     
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  20. wylie

    wylie Moderator Staff Member

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    Regardless of whether you ask for a reduction, ask for it to be fixed or walk away... the agent now knows about this and future buyers "should" be told about this issue as well.

    So this vendor has a big problem and needs to address it, reduce the price, or realise that the agent has a legal duty to let future buyers know about the problem.

    This is my understanding of things anyway.
     
    Colin Rice likes this.