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What type of B&P issues made you pull out of the contract?

Discussion in 'The Buying & Selling Process' started by qonyx_sydney, 18th Sep, 2015.

  1. qonyx_sydney

    qonyx_sydney Well-Known Member

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    Hello,

    I have just had a B&P report back from a QLD property and the report seems pretty horrific however i did go into the contract knowing these issues existed.

    A condition of the contract I would pay for the restumping of the property up to a total of $10k, any cost above this would be funded by the owner. Would restumping eliminate these issue below?

    If you saw these would you run away (i did buy the property at about 25% discount to other properties with no work to do)

    The core issues are;
    • Most the stumps are showing to be out of plumb. It would be advisable to engage both geo technical and structural engineers to inspec & report, due to the active soils in the area
    • Crack Type: Diagonal cracking Located: Garage Width: 12mm Length: 800mm.
    • Crack Type: Differential movement cracking Located: Garage Width: 10mm Length: 2.0
    • Crack Type: Stepped cracking Located: front entry Width: Length: 1.5M 1-3mm.
    • Major settlement or movement cracks were evident in walls. Repairs will be necessary and you should engage a Structural Engineer to investigate the cause of this cracking.
    • Patio is noted to be leaning, movement has occurred, an engineer must inspect and report.

    Interested in your thoughts on this?

    Rgd,
    QS
     
  2. mush

    mush Well-Known Member

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    Difficult in that structural engineers often require time to monitor cracks and movement which you obviously do not have.
    All you can really do is estimate cost of repairs on a worst scenario basis and do your calculations to decide if it is worth proceeding.
     
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  3. The Y-man

    The Y-man Moderator Staff Member

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    I pulled out of one in Qld when they found a lake under the house......

    The Y-man
     
  4. mush

    mush Well-Known Member

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    Handy if you like fishing......
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    Like it wasn’t half obvious? I thought that the mooring out the front was a dead giveaway.
     
  6. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Restumping will not fix those issues in my opinion, no. The ground is unstable. I'd rescind the contract and move on if I were you.
     
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  7. Leo2413

    Leo2413 Well-Known Member Premium Member

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    If they are asking 500k, I would determine how much it would cost to fix the issue and offer double less. So if it would cost 50k then make an offer of 400k or less. Last ditch effort to 'help em out' :D
     
  8. balwoges

    balwoges Well-Known Member

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    House I was recently interested in buying:

    1. Piers holding up back of house above height requirements, unsafe and needed steel support.
    2. Carport [3 cars] below industry building standards and lacking sufficient support on 1 corner, more steel support needed.
    3. Verandah which wrapped around 3 sides of house, wooden flooring should be replaced ASAP.
    4. Ensuite bathroom which had been added after house built, check whether Council approved.
    5. Ant caps on under house piers not sufficient.
    6. Tiles in main bathroom drummy.

    ! month later the house was sold for $7,500 less than I offered.
     
  9. qonyx_sydney

    qonyx_sydney Well-Known Member

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    House is $220k in the old Ipswich area..... the fully rennoed houses in the area are selling for high 200s......

    But holy moly, the B&P has scared the bejesus out of me... i've calmed down a bit and realised that i can make some good decisions....

    Perhaps I can make some kind of opportunity out of this but really need to think about it.
     
  10. qonyx_sydney

    qonyx_sydney Well-Known Member

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    Would you have bought the house for $7500 less? What was the cost for exiting the contract
     
  11. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Really the only way forward (if you want to move forward) as I see it, is to get some indicative costs for the works. Then let them know how bad a shape the place is in and make an offer that takes into account the repairs and risk. Good luck mate.
     
  12. spludgey

    spludgey Well-Known Member

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    Sounds to me like all issues are stumping related.
    I would certainly ask for a discount, but it wouldn't necessarily make me pull out of the contract.

    The crack in the garage shouldn't come to you as a surprise though. Given its size, it's definitely something that you should have spotted during the inspection.
     
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  13. D.T.

    D.T. Adelaide Property Manager Business Member

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    Had one that was asbestos clad so bailed using cooling off period as that'd blow the reno budget
     
  14. Vultures

    Vultures Well-Known Member

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    Termites tend to scare people, I had a buyer pull out because of "evidence" of past termite activity.
     
  15. RetireRich101

    RetireRich101 Well-Known Member

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    It appears you've spent $400-500 on B&P without putting the property under contract?
    I suggest you put the property under contract and learn from this experience.. it is fun ;P

    You should find out what Bank Valuer puts in his report and how does this affect your finance situation. More importantly if your Lender will lend you money on the security first
     
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  16. qonyx_sydney

    qonyx_sydney Well-Known Member

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    I think i may have gone about this the wrong way but i guess it is a $500 lesson learnt.

    I feel like I'm under time pressure to do all my B&P & finance as soon as i had put my offer that had been accepted and signed by both parties on the contract.

    Here are the steps i follow once offer has been accepted and signed by purchaser let me know if i am doing in the wrong order for a QLD purchase.

    1. Negotiate and agree on purchase price with REA - Day 1
    2. Ensure 14 day B&P and Finance condition is on contract - Day 1
    3. Purchaser and vendor sign contract and send to solicitor to start legal process - Day 2
    4. Engage lender for finance final approval - Day 2
    5. Engage B&P for inspection - Day 2
    6. Review B&P report (this usually comes back before finance approval) - Typically Day 3-6
    7. Bank valuation - Typically Day 5-10
    8. Unconditional contract - Day 14
    9. Settlement - Day 30
    I like to push to try to get my B&P and Finance answers ASAP, however it is always the B&P that comes bank first.....

    Should this be done in a different order?
     
  17. Leo2413

    Leo2413 Well-Known Member Premium Member

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    [QUOTqonyx_sydney, post: 67760, member: 216"]I think i may have gone about this the wrong way but i guess it is a $500 lesson learnt.

    I feel like I'm under time pressure to do all my B&P & finance as soon as i had put my offer that had been accepted and signed by both parties on the contract.
    No need to feel under pressure, the only person who should be under pressure is the vendor. They are already emotionally, financially and god knows what else committed to the deal, and you can pull out with very minimal loss under clauses, so you have the upper hand once deal is signed and awaiting BnP and Finance.

    Here are the steps i follow once offer has been accepted and signed by purchaser let me know if i am doing in the wrong order for a QLD purchase.

    1. Negotiate and agree on purchase price with REA - Day 1 OK
    2. Ensure 14 day B&P and Finance condition is on contract - Day 1 OK (if you can negotiate for a little longer than ever better. Some vendors will just concede instantly and others might be hesitant. Always try to get few days longer if you can, otherwise its fine.
    3. Purchaser and vendor sign contract and send to solicitor to start legal process - Day 2 OK
    4. Engage lender for finance final approval - Day 2 OK ( day 1 if possible).
    5. Engage B&P for inspection - Day 2 OK
    6. Review B&P report (this usually comes back before finance approval) - Typically Day 3-6 (yes and negotiate a price reduction if it is warranted. You have nothing to lose. They are in the weaker position here. If there are repairs etc estimated at 10k, ask them to meet you half way, "we are really disappointed that we uncovered 10k of defects and we feel its more than fair to have half compensated for". The more you firmly create the idea of how 'upset' you are with it (intelligently not like a loonytoon) the easier you will get them to concede and meet you half way. You have nothing to lose. If they call your bluff till the end you just fold and accept it. (this I what I would do, so you have to do what your comfortable with.
    7. Bank valuation - Typically Day 5-10
    8. Unconditional contract - Day 14
    9. Settlement - Day 30
     
    Last edited: 22nd Sep, 2015
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  18. qonyx_sydney

    qonyx_sydney Well-Known Member

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    Great reply really appreciate it.

    One thing that someone mentioned to me is that they DON'T engage the B&P until they have the bank valuation back?

    Is this something you would recommend?

    I would imagine you would cut it quite thin from a timing perspective however could save the cost of a B&P if the valuation came back unfavourable
     
  19. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Personally I wouldn't do that, unless I was very concerned that the finance may not come though. You should really have a great idea from your Finance broker way before all this how much you can borrow and also if your diligent with your research and know what the property is worth its very unlikely you would be making an offer that is way over valued.

    It will also slow the process and not leave you enough time (perhaps) to get quotes for things that need fixing so you can present it to the agent/vendor.