Strategy for negotiating on repairs from building and pest inspection

What strategy do you use to successfully negotiate the price down when issues are found on a b & p in a hot market?

Interested to hear what worked for you

 

Depends if its a real structural issue? In a hot market, others might overlook it and you lose out. Had a buyer try to negotiate me down for some generic 'condition = fair' comments and I told them to crash the contract if they want to.

 

Probably not going to happen in a hot market, unless it’s a major structural issue. Low risk that a buyer will walk away from a purchase, and reasonable chance they’ll get same undiscounted price from another buyer..

 

I always talk it down in the initial inspection prior to making an offer in the hopes the agent will lower the vendors price expectation, however it usually doesn’t work in a hot market. In a hot market buyers are going unconditional site unseen, so you really have no bargaining power. My last 2 buys I’ve had to go unconditional without building and pest just to get the deal. We do have a building background though and know what to look for regarding pest damage.

 

I would never compromise B&P and would not just walk away but tell the REA who says I need to act (now) that I dont want them to call me if another property comes up. If a vendor / agent needs to throw that one of the table its time to walk away.

Thats said I come from Sydney where termites, asbestos fibre insulation and damp in older houses are prevalent.

 

In a hot market you probably don’t have much chance.

Every property will have some minor defects. Just allow for that when making your offer to buy.
Marg

 

In a hot market, given B&P issues, you can try to improve the terms of the contract for the sellers in exchange for a price reduction. Really all you have is to bluff and get your agent to work on their emotions. But in hot markets your bluff may be called and you lose the deal when the clause date expires.

Having said that. even in hot markets if your only asking for a few thousand reduction, emotionally most sellers won't want to go through the whole process again, more uncertainty etc etc and there is a good chance they will come to the table. Unless your asking for too much.

 

Hi I’m newbie and keen to learn. How significant is a major structural issue and how much roughly to solve the issue. Thx

 

Your question is similar to how long is a piece of string which it would really depend .

The report will outline if it is structural issue or not (otherwise find a new inspector) and the inspector usually has a ball park figure to fix the issue (otherwise again find a new inspector.

I would also call a contractor or two just to verify the inspector's price was reasonable and also add in a margin on top of the price just to make sure you are not out of pocket.

E.g. if it costs 8k to fix you might ask for a 10k->15k reduction, the higher you go for the reduction the less likely the vendor will accept it. You can also negotiate other things such as early access to fix the issue (has additional risk) or even spilt the repairs 50/50 (personally I wouldn't do this unless the market was crash hot and you are left with pay all repairs (8k) or walk away.