Time to walk away?

We found a house in a desirable area for a what appeared to be a very good price. We put the price down to: suboptimal layout, simpler build than surrounding properties and likely future build site next door (older house with massive yard). Made an offer taking into account these factors.

Upon B&P, following turned up:

- prior termite damage (not currently active)
- control joint opening up more than expected and uneven. Requires engineering report and could lead to needing underpinning.
- boundary fence incorrectly placed - the block is a little smaller than currently appears, likely because property owners next door didn’t care about exact line, as it’s a big empty lot. Will need a fence one day


Once discussed with agent, seller said things like:
- oh yeah, had termite treatment 8 years ago
- oh yeah, control joint was this state when I bought it 13 years ago
- boundary fence is a bit off

So, obviously underpinning being the biggest, these red flags are making us doubt what else could be wrong.

Seller is doing an engineering report, but I’m thinking of pulling the pin. But can’t seem to say no just yet.

Please help!

 

we said no once for termite damage to a rear wall. The property has had great appreciation and we regretted it.

 

Sounds like brand new properties are more suitable for you. Frankly older properties would have all these problems. As long as the bones are good. You do the risk analysis. It's the land and the location.

 

Well, location is pretty good, but is it normal for 20 year old property to have these issues?

 

It's hard to answer. I have a 1940s house and upon building inspection, it is ok apart from past termite infestation. Is it normal to have a 1940s house still standing after all these year? I don't know but I am glad it is.

 

Old houses have some issues but they are far cheaper than new ones.

It doesn't sound like too many issues but you could negotiate a price reduction to cover cost?

 

You can always renegotiate later...

 

Have the block surveyed, and factor in the cost of rebuilding the fence on the correct boundary.

 

Depends on whether you want to do the work or not. Also sounds like nothing is really urgent. Kinda like the seller, you probably won't even care once you're in the property.
Termite damage is not as big an issue as I once thought as long as it doesn't affect structure and you keep an eye on it. Strange that it occurred in past 20 years and may or may not happen again. If you stay alert, you can deal with it if and when termites are seen.
As stated previously, you can continue to negotiate after B&P.
wattle.

 

Wait for the engineering report I reckon. Use that to bargain down further.

 

Offer and signing contract are not the same. Finance subject to B&P.

 

Oh yes, you're right. All good. These days, I wouldn't let that stop me though.

 

I have found it much harder to renegotiate after a really bad B&P. You would have to be in a buyers market with a motivated vendor and a property that has been on the market for a while.

I recently pulled out of a deal in SA after a really bad report and vendor wouldn't negotiate.

 

Hi! We actually offered $1,112,000 and the vendors accepted, however upon further assessing with the B&P report they provided, there’s issue with the dampness,subfloor ventilation (they said common for the old houses here). Now the surveyor estimated $10-15k of repairs, how can we renegotiate, we’re about to sign the 66w certificate and contract tomorrow. It’s a preauction offer. Thanks!

 

Would you have paid $1,127,000 for the property if there weren't any issues? If yes, then try to negotiate as best you can to get a reduction. If no, walk away.

 

"Given the dampness that has been identified in the B&P report supplied by the vendor, we have obtained quotes to remedy this issue and the quotes came in around the $15k mark.
Due to the well-known health risks associated with dampness and mould, this is something that needs to be addressed quickly.
We would like to propose the two following options:
1) The vendor to fix the dampness issues prior to settlement.
2) A reduced contract price of $1,100,000, in order to allow us to address the issue, along with early access to the property.

Regards,
Pinkmarjory"

 

Of course, there is a third option. They reject the other options and take it to auction or accept another offer pre-auction. You just set a price base for the agent to use adn he could offer it to someone else for $1.114K and its gone. Allowing early access may also be unacceptable to the vendor and the convenience for you is an inconvenience cost to the vendor as well as the actual cost of repairs. Sometimes evident defects have already been a factor in the price accepted by the vendor (as they knew of the defect?) and they may not budge for 1% of the sale price