Negotiating after B&P results

Discussion in 'The Buying & Selling Process' started by Taku Ekanayake, 11th Nov, 2015.

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  1. RetireRich101

    RetireRich101 Well-Known Member

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    If you're using major 4 they may not ask for B&P, other smaller lenders likely. Your bank will know the condition via the bank valuation risk rating on the improvement and special comments on the report. If a risk rating of 3 or higher you may have problems bank lending money.

    why spend all the effort on quotes and negotiate, if you're bank won't lend you money. Bank val should be immediately arranged when offer is accepted.
     
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  2. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    @Biz thanks for the feedback. Only considered doing the negotiating myself, but going through solicitor may be a more formal, and less stressful process. Thanks!
     
  3. Biz

    Biz Well-Known Member

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    For sure mate, go through the solicitor. Remember the agent works for the vendor at the end of the day. Like i said, list all the problems, put a cost next to them (at the high end ;) ) then go for jugular. You are the one with all the power in this situation. Dont underestimate what a large reno costs to do.
     
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  4. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    Hey @RetireRich101 thanks for the feedback. This one is with a major 4.
    Did you see the risk rating I posted from my valuation in relation to your first post? I've attached again
     

    Attached Files:

  5. WattleIdo

    WattleIdo midas touch

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    Hmm a very good debate -don't know how I missed it. Have to say I agree with the view that the B&P puts the ball back in the buyer's court. Not talking about petty issues but vendors & REA's don't always tell you everything e.g. sewer pipes through yard and trees infested with termites and subfloor damage from many moons ago.
    It's just business. Not here to be chummy with vendor nor REA. Who cares if they like you. However, do take what Jamie M said into account. If there is no-one else going to buy, go for it. If you have competition, the vendor could choose to say no to further negotiations. Then you pay what you initially agreed or walk away.
     
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  6. See Change

    See Change Well-Known Member

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    Personally I'd still go through the agent . He has more to loose if you pull out . Doesn't make any difference to the solicitor.

    Starting talking about other properties with the same agent and mentioning other ones with other agents .

    All comes down to vendor . Their motivation .

    We had someone ask for a 5 k discount because there were termites in a tree stump in the back yard and told them where to go . Brisbane everywhere has termites , they're not in the house ...

    Cliff
     
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  7. WattleIdo

    WattleIdo midas touch

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    Me too. Sometimes a solicitor will try to talk you out of it because they don't believe it's possible and they're not that way inclined. Depends who you get. My last solicitor tried to talk me out of the deal altogether...being a single female and all, I obviously didn't know what I was getting myself into. :rolleyes: Or get a good up-to-date solicitor.
     
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  8. Biz

    Biz Well-Known Member

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    Cliff, either way you have to formally request it. If you ask for a discount the agent will hear about it either way. Most agents just talk smack and will try and down play issues in the b&p. Just my opinion but i prefer to not deal with them where possible. Every deal is different though.
     
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  9. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    That's a very good point you make there. I honestly feel as though the REA just wants to get the deal done before auction, even if it means taking a lower price. For him, the difference in commish is a few hundred dollars.

    The contract crashed twice already with a different REA. It smells terrible due to nasty carpet inside I've been told by my PM.
     
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  10. larrylarry

    larrylarry Well-Known Member

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    I hope you don't uncover more issues when you lift the carpet.
     
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  11. RetireRich101

    RetireRich101 Well-Known Member

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    There is a risk rating of 3. Big4 may not have a problem. Firstmac, Pepper the like may have a problem. Not saying they will reject, but requires some massaging by your broker/BDM.

    everyone plays it differently. if this was me,
    1. I would get confirmation from Lender that will accept the security as is before moving forward
    2. submit a revised offer of $20k discount now
    3. if no counter offer or feedback between now and auction. Make final submission 3 days before Auction of $10k, if you feel this is top dollar you will pay
    I don't feel going extent to get quotes to show and tell how much it cost of each repair would help as Vendor knows it needed repair and probably wont budge any further.
     
  12. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    Thanks for the break down. The property settles on the 20th Nov. The auction is scheduled for 28th Nov. so should I do the final submission 3 days before it settles, or ask for settlement extension until auction day, and do a final submission three days before auction day?
    Hope this makes sense.
     
    Last edited: 11th Nov, 2015
  13. RetireRich101

    RetireRich101 Well-Known Member

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    I will share this recent purchase of mine, similar situation or not..
    1. I asked for a discount of $15K, it got accepted
    2. B&P came back with many pages.
    3. I offered another $12K which was again accepted.
    This equate a total 12% discount in a Brisbane property while other are paying listed price

    I find step 3, is when you CAN really negotiate. What is there to lose because you already have it by the balls....?

    After the deal was sealed, the talk with the Agent gave me further my approach was successful.
    • Agent has been in the RE industry for 30+ years, probably in his 60s and seen it all type of RE.
    • He understands this property is in bad shape, and though a low entry price, it is likely 1st, 2nd, 3rd etc buyer will either fail on B&P or Fin, and property will be on market for long time.
    • I gave the Agent my experience how I did a recent deal, with similar situation.. I gave my sales pitch talk **** and reassured that I would be the only one with experience to get the deal over the line..etc
    • He said to me, he had many interested buyers. some made offers that is similar, same or higher ( he wouldn't tell what are the offers), BUT he chose me as first to submit the offer to the Vendor. His vendor trusted him, so that made it easy
    • Agent could be lying with amount of buyer interest, but yeah the listing had 1500+ views and I was only responsible for 20 of them ;)
     
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  14. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    That is a solid result by the sound of things! Well done.
    Some great tips. I'm very much more confident asking for $12K off (even more) with all the feedback so far.
    Thanks!
     
  15. Special order

    Special order Well-Known Member

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    That means you will be paying roughly 210 after discount for a house and land in seq? I imagine this is south Logan? Will be interesting if this is going to fly, cheapest buy of the year... Saw a renovater sell in bethania last weekend which was 232

    Sold Price for 23 Parliament Street Bethania Qld 4205
     
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  16. TFBoy

    TFBoy Well-Known Member

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    Taku Your Val look like its from HTW.

    Usually 3's are OK without LMI, its when you get to 4's when you might encounter some LVR restrictions.
     
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  17. RetireRich101

    RetireRich101 Well-Known Member

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    Can they actually do this, assuming you're still conditional to B&P and Fin clause? Can they accepted an offer but still advertising for the auction?

    My bet is they won't grant an extension because they want to proceed auction immediately if you pull out.
     
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  18. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    Hey @RetireRich101, sorry had my wording wrong - the property goes unconditional on the 20th (not settles), settlement is late December.
     
  19. Simbo

    Simbo New Member

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    Hi All,

    Interesting read, especially the points regarding the involvement of the REA.

    I've just witness a B&P inspection which has highlighted some significant issues which would be a deal breaker without negotiation; For example. the free standing garage has 4cm cracks in it's walls indicating that there are structural problems in the foundations. Also, it may have been an unapproved structure built over a sewer. I'm waiting for the building search to come back to confirm that.

    I was thinking that my next step should be to find a builder and getting some quotes before going back to the vendor. The place goes unconditional in 8 days.

    Just wondering what your thoughts are.
     
  20. Steven Ryan

    Steven Ryan Well-Known Member

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    @Simbo, you're pretty might thinking in line with how I'd go about it (and how clients have been - had some similar ones recently).

    Let agent know there are B&P issues (so they can soften the vendor up for extensions and price reduction) and explain you're going to send a builder or structural engineer out to check/quote.

    Have you solicitors extend B&P/finance dates as necessary, get the quote to your solicitors and have them push hard for a reduced purchase price.

    I love finding "problems"!
     
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