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Author: Subject: House price negotiation after survey, help
corrado vr6

posted on 15/12/15 at 11:41 PM Reply With Quote
House price negotiation after survey, help

Hi there, as I've read a few posts recently about buying houses I thought this could be a good place to ask for opinions.

Basically I put an offer in on a house 2 months ago which I stated at the time would be subject to survey.
We have had the survey back a few weeks ago which highlighted damp in one of the party walls (mid terraced 1900's house) and a further 2 other walls.
Estate agent has had a damp "specialist" round and has quoted 2022 plus vat for injecting the walls and plastering.
I have had an independent damp survey carried out which has advised that certain factors are contributing to the damp ie: ground level to high, render bridging the dpc and from having a builder quote to rectify these things has come in at 2430.
None of the damp is visible only shows up on the meters however the property was advertised as needing internal modernisation.

There has been a retention of 5k applied due to the damp issues.

I would like to now negotiate on the price, however my initial offer was already 10k below the asking price of 210k so we are already at 200k I'm thinking of going in at 193k in the hope of settling at maybe 195 or 196k.

My questions would be does this seem reasonable based on the above? However I appreciate your only getting one side of the story.

Would I be better phoning the estate agent to negotiate or writing a good letter including proof of retention, survey, our damp report and builders quote? Or would this be giving to much information away? I was thinking of asking the estate agent to pass on this letter to the vendor.

We are a first time buyer and the property is empty as it was their parents home so should have been a quick simple sale.

Any advice welcome, this is the biggest purchase of my life and want to try and get it right!

Thanks Greg





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mark chandler

posted on 15/12/15 at 11:58 PM Reply With Quote
First question, how long has it been on the market as this drives flexibility.....

My house took 18 months to sell, went from 365k down to 290k to sell, my buyer was concerned about the central heating needing replacement so I met them halfway selling in the end for 285k, house was empty wanted it gone (the market was falling during thus period).

I get the impression estate agents are trying to push hiuses back up to prices from a few years ago.

Did they accept 200k, if so I would aim to have the damp knocked off the price, expecting to meet half way.


As the market is not moving I would keep my eyes open for other properties, it's a buyers market after all.

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corrado vr6

posted on 16/12/15 at 12:19 AM Reply With Quote
Thanks for your reply

The house was advertised for about a week online and had a set day for viewings, we saw it on a Saturday which was the first day for viewings and I put the offer in on the following Monday, the 200k wasn't immediately accepted and the estate agent tried telling me that another 500 or 1000 would satisfy them, however I stuck to my guns and by that evening I had a call to say they would accept 200k.

I don't want to be cheeky but I factored the modernising into my offer, however the damp was a hidden defect and changes things slightly





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snapper

posted on 16/12/15 at 04:32 AM Reply With Quote
I would use the survey and the quotes to fix as your bargaining leverage saying you want a further X off
This is where you need to be clear how much you want the house and how much your prepared to pay.
They may be aware of the damp or this may be new info to both parties however it's a strong bargaining position





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cliftyhanger

posted on 16/12/15 at 06:34 AM Reply With Quote
Playing devils advocate, the estate agents and seller will be puzzled why you have reduced the offer by 7k when the cost of repair is 2 1/2K. And they would have a point.
Also buying a house that needs work will always cost more than you at first think, be prepared for that, other stuff WILL rear its ugly head as work progresses.

On the other hand, if he sale has progressed, and is nearing exchange with a completion date looking good, they may be tempted to make a fair reduction. If not they may tell you to go forth and start the process again. Or anywhere in the middle.

Think of it like buying a car. One is advertised as needing some TLC, you put an offer in that is reluctantly accepted. You then notice it needs 250 of tyres. Would it be fair to reduce the offer by 500? Probably not.
My point is that is you put in a punitive reduced offer, you may get shown the door.

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ian locostzx9rc2

posted on 16/12/15 at 06:36 AM Reply With Quote
It depends how you want the house you could ask if the seller would drop the price by the amount the works going to cost this is what we managed to do many years ago for a damp issue if they don't go for that see if there meet you half way. Always difficult if you have set your heart on it and spent money on a survey .
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v8kid

posted on 16/12/15 at 06:44 AM Reply With Quote
I used to buy and renovate property as a sideline. If I were the seller I'd do the repairs and put the house back on the market at the full price. Do you want to provoke the seller into this after negotiating a good discount? After all the house was only on the market for a week before you made an offer - think of the message that is sending to the seller





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corrado vr6

posted on 16/12/15 at 07:24 AM Reply With Quote
Thanks for all the comments

Quite a mixed bag of opinions


I do know that the vendor is in a hurry to sell as this has been made quite clear by the estate agent.
I appriciate asking for a reduction of more than the work would be seen as wrong, so I'm thinking of totalling the immediate work such as the injecting which the mortgage company want doing at present and either asking to have the work done before exchange of contracts or a reduction to reflect the cost of the work.





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TimC

posted on 16/12/15 at 07:46 AM Reply With Quote
This is straightforward negotiation. It comes down to how badly you want the property (the opportunity cost if you miss out) and how badly the vendor wants it gone.

Either way, I don't see how an approach to reduce the offer will cause you massive issues. Unless they are already having second-thoughts about your existing offer, I would suggest that the worst that is likely to happen is they say 'No, we would need your original offer.'

However, even with blunt negotiation, it helps if the other party can justify their concession to themselves (tell themselves, their family and their mates that "It was fair enough really." Hence, your leap to 7k is going to make that more difficult - and success less likely.

I think I'd say, "Look, the survey has brought into focus c.2400 of pure cost we'd need to absorb. In light of this planned works, I also have to consider how I fulfill my obligations under CDM2015 and some waste disposal costs (you are just trying to help them to justify a lower sale price - could say anything plausible,) therefore I would like the vendor to consider a revised offer at 4k less than original. This comes with a commitment from us that we will do everything possible to push the sale through ASAP."

I'd do this over the phone or in person with the estate agent.

[Edited on 16/12/15 by TimC]






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daniel mason

posted on 16/12/15 at 07:51 AM Reply With Quote
I'd go in lower than that or offer to pay the asking price if they sort the damp issues!
The worst they can do is say no!

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v8kid

posted on 16/12/15 at 08:40 AM Reply With Quote
quote:
Originally posted by daniel mason
I'd go in lower than that or offer to pay the asking price if they sort the damp issues!
The worst they can do is say no!

Depends on the seller the worst they can do is get pissed off and withdraw - remember it was only on the market for a week before it had an offer. Also the seller reduced the price to get a quick sale and now it looks as if it is anything but.

If I were the seller I'd think you were trouble and put it back on the market - but then I was semi professional maximizing the profit and they are not.

Interested to see the outcome - who will blink first

Cheers!





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motorcycle_mayhem

posted on 16/12/15 at 08:40 AM Reply With Quote
Welcome to the world of greed, deceit and all that goes with buying a house.

I've had to move due to work (or lack of) etc., etc., so had a few experiences.

Firstly, the damp as an issue. It probably isn't too much of an issue. It's a 1900's house, so it needs to breathe, etc. It may well be 'damp' on a meter, but that may well not be a problem. Bridging the DPC is a classic... so is filling cavity walls on an older property with suspect materials and stuffing insulation down the eaves, stopping air circulation. Silicon injection of the DPC sub base probably won't help too much.

OK, the vendors, Estate Agents and everybody else. Look at the process as filling a trough with money, so that all the pigs can feed. Down to you to control what goes into the trough. If the house is 'right' then just pay up, if you have concerns then put lower offers/reparation to the fore, be prepared to walk away. Plenty of houses out there.

An 'offer' means nothing. Exchange of contracts does.

Best example I had was a place up for 215 I liked. I offered 175 (cash/no mortgage) based on my assessment of repairs/work needed to be told by the vendor 'I'm not giving it away for that'. The Agent 'we valued this at 225 it's already been reduced'. House then sat for 3 years 'For sale'. I bought another in the meantime, just down the road. The house finally went for 143.
Not an isolate example in my lifetime so far, but just one of them.

Another, I had an Agent calling me on the morning of exchange wanting an extra 10% because 'values' had gone up (f%%%). I answered by a response (after calming down) of saying no, 10% less then. A call from the Agent an hour later said there had been a 'misunderstanding' and that we're going to exchange.... I didn't.

It's your money, your life, your liability when you buy it. If you're not 100% happy, walk away.

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russbost

posted on 16/12/15 at 09:07 AM Reply With Quote
quote:
Originally posted by TimC
This is straightforward negotiation. It comes down to how badly you want the property (the opportunity cost if you miss out) and how badly the vendor wants it gone.

Either way, I don't see how an approach to reduce the offer will cause you massive issues. Unless they are already having second-thoughts about your existing offer, I would suggest that the worst that is likely to happen is they say 'No, we would need your original offer.'

However, even with blunt negotiation, it helps if the other party can justify their concession to themselves (tell themselves, their family and their mates that "It was fair enough really." Hence, your leap to 7k is going to make that more difficult - and success less likely.

I think I'd say, "Look, the survey has brought into focus c.2400 of pure cost we'd need to absorb. In light of this planned works, I also have to consider how I fulfill my obligations under CDM2015 and some waste disposal costs (you are just trying to help them to justify a lower sale price - could say anything plausible,) therefore I would like the vendor to consider a revised offer at 4k less than original. This comes with a commitment from us that we will do everything possible to push the sale through ASAP."

I'd do this over the phone or in person with the estate agent.

[Edited on 16/12/15 by TimC]


I would agree with just about everything Tim says here, he's pretty much covered it. The only thing I would add is that someone mentioned "it's a buyers market" - well that may be the case in the neck of the woods that that poster is from, but around here (Essex) the market is absolutely insane - any 2 or 3 bed semi or terrace which is in reasonable nick & goes on sale at anything like a sensible price is snapped up in days - the buy to let market has left this size of property in very short supply, strangely it seems to have had the effect only in this "bubble" of first & second time buyers property, the larger, more expensive, better positioned, detached 4 & 5 bedroom stuff has probably only very recently struggled back to the sort of prices we saw around 2007.

If the market around you is anything like as busy as ours & your property falls into the above "bubble" ie 2 or 3 bed terrace or semi then I would be wary of losing the purchase as anything which comes on the market after the Xmas break will almost certainly be priced higher. From what you've said total works are likely to cost a bit over 4k, if you got a further 2k off the already discounted price then I'd say you were doing well

Either way - good luck with the purchase, I doubt you'll regret it, owning against renting is a no brainer if you are in a position to own & don't need to move around the country with your job etc.





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Sam_68

posted on 16/12/15 at 09:10 AM Reply With Quote
quote:
Originally posted by TimC...I also have to consider how I fulfill my obligations under CDM2015 ...


Point of order, but as a domestic householder, you don't have any: the 'client' responsibilities on domestic projects under CDM 2015 devolve upon the contractor.

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nick205

posted on 16/12/15 at 11:02 AM Reply With Quote
Skimmed through the thread and would be inclined to ask for the cost of the work to be knocked off the buying price. Any buyer worth his salt will do a survey and find the same issue - if the seller wants it gone they'll drop the price. If not they need to do the work and foot the bill anyway.

Being local to you, may I ask where the house is?

The comment on a "buyer's market" is IMHO incorrect round here!


ETA...to explain my last comment, I've tried buying houses round here for the past few years and it seems to me to be a seller's market with little room for buyers.

[Edited on 16/12/15 by nick205]






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ravingfool

posted on 16/12/15 at 11:29 AM Reply With Quote
The whole point of a survey is to get an expert to find the things which you as a naive buyer have missed but assumed to be in good order (usually) so that you can confirm that the price you offered is appropriate.

There's nothing wrong with going back and asking for a reduction but if you do that then yes, there's always a risk that the seller is completely unreasonable and pulls out for no reason.

Normally however a seller will expect to see justification, that means you're going to be asked to reveal the survey and quotes in full and then the seller will consider how much of an issue they think these points are and weigh up the pros and cons of accepting a reduced offer from you.

Just based on the little information in the thread and not knowing the detailed circumstances; if this damp is really news to you then I'd go in an expect the full remedial cost off the asking price or as was suggested above, have the seller do that themselves prior to completion from an company which is going to be acceptable for you and come with appropriate guarantee etc.

If they're desperate to sell as you believe then they're going to be pragmatic about this. Very few sellers would withdraw simply because you've had a negative survey and asked for the cost of remedial works off the price. It would be different of course if the house was advertised as requiring work of this type or was in such a bad state that you would assume similar things would be necessary.

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Sam_68

posted on 16/12/15 at 03:45 PM Reply With Quote
quote:
Originally posted by ravingfool...Very few sellers would withdraw simply because you've had a negative survey and asked for the cost of remedial works off the price.


Although we may need to remember that the OP is suggesting an offer that's 17K down on the original asking price, against 'unexpected' remedial works estimated at only 4.5K.

We've just told a prospective purchaser to 'do one' on purchase of my mother's old house (similar situation to an extent - vacant possession in need of a limited amount of modernisation), because they were, in our opinion, taking the p*** by trying last-minute 'gazundering' on items we felt to be unreasonable.

No harm in politely and diplomatically putting the question, of course, but be wary of being too bullish about it and pushing your luck too far, if you really want the property.

Also be cautious about diagnoses of damp in this sort of property. 'Rising damp' is not nearly as common as you might expect, and failed DPC's (I'm assuming from the comment about render bridging of the DPC that the property actually does have one) are fairly rare. And you would expect a fairly high moisture level reading in the plaster in a house with solid walls that has been left vacant and unheated for a while. Surveyors will cover their ass with an eye to their PI insurance, and damp proofing specialists are seldom reluctant to part people from their cash. I'm not saying that the problem is entirely spurious - and reducing ground levels and chopping back render to avoid bridging the DPC might help if there is a problem - but it might be, and unless someone could point out to me exactly where and why the existing DPC has failed, I'd be wary of paying for an injected DPC as little more than snake oil, unless the mortgage lender is demanding it.

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ravingfool

posted on 16/12/15 at 07:35 PM Reply With Quote
quote:
Originally posted by Sam_68
quote:
Originally posted by ravingfool...Very few sellers would withdraw simply because you've had a negative survey and asked for the cost of remedial works off the price.


Although we may need to remember that the OP is suggesting an offer that's 17K down on the original asking price, against 'unexpected' remedial works estimated at only 4.5K.

We've just told a prospective purchaser to 'do one' on purchase of my mother's old house (similar situation to an extent - vacant possession in need of a limited amount of modernisation), because they were, in our opinion, taking the p*** by trying last-minute 'gazundering' on items we felt to be unreasonable.

No harm in politely and diplomatically putting the question, of course, but be wary of being too bullish about it and pushing your luck too far, if you really want the property.

Also be cautious about diagnoses of damp in this sort of property. 'Rising damp' is not nearly as common as you might expect, and failed DPC's (I'm assuming from the comment about render bridging of the DPC that the property actually does have one) are fairly rare. And you would expect a fairly high moisture level reading in the plaster in a house with solid walls that has been left vacant and unheated for a while. Surveyors will cover their ass with an eye to their PI insurance, and damp proofing specialists are seldom reluctant to part people from their cash. I'm not saying that the problem is entirely spurious - and reducing ground levels and chopping back render to avoid bridging the DPC might help if there is a problem - but it might be, and unless someone could point out to me exactly where and why the existing DPC has failed, I'd be wary of paying for an injected DPC as little more than snake oil, unless the mortgage lender is demanding it.


Did you actually tell them to 'do one' just because they asked for a reduction on survey?

Or did you refuse to reduce price first and then re market because they wouldn't proceed at the original price?

Normally surveys occur with a couple of weeks of doing the deal and it's hardly gazundering to go back to attempt to renegotiate on a survey, supported by estimates.

Sellers may disagree with survey/quote or simply not want to discuss further reduction but it is odd for a seller to tell a prospective buyer to get lost rather than either say they won't negotiate or to enter into sensible discussions.

It really doesnt matter that the price agreed is under the asking price. It was only ever an asking price and often asking prices are no where near real value. Obviously these sellers know that the real value (right now in the current circumstances) is close to the price they've accepted so the OP should forget the original asking price.

He's just asking for money off the price which was agreed subject to the survey confirming his assumptions about the structure of the house... Which unfortunately it hasn't, devaluing the house by at least the remedial cost (or at least that's the assumption, not always the case though)

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Sam_68

posted on 16/12/15 at 09:27 PM Reply With Quote
quote:
Originally posted by ravingfool
Did you actually tell them to 'do one' just because they asked for a reduction on survey?


It's a bit more complicated than that; the original offer was below asking price (nothing unusual there, of course). The survey had identified an issue, which we'd negotiated a resolution to.

Then they started coming back with a series of items one after another that were basically a wish-list from them and their builder (not essential or mortgage dependent), timed late enough in the sale process that we concluded that it was a deliberate 'gazundering' ploy - a game in brinksmanship - so we told them to forget it... we're not in any rush to sell and it's a rising market.

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ravingfool

posted on 17/12/15 at 02:02 AM Reply With Quote
quote:
Originally posted by Sam_68
quote:
Originally posted by ravingfool
Did you actually tell them to 'do one' just because they asked for a reduction on survey?


It's a bit more complicated than that; the original offer was below asking price (nothing unusual there, of course). The survey had identified an issue, which we'd negotiated a resolution to.

Then they started coming back with a series of items one after another that were basically a wish-list from them and their builder (not essential or mortgage dependent), timed late enough in the sale process that we concluded that it was a deliberate 'gazundering' ploy - a game in brinksmanship - so we told them to forget it... we're not in any rush to sell and it's a rising market.


Ah now the full story makes much more sense!

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Mr Whippy

posted on 17/12/15 at 12:53 PM Reply With Quote
My folks have a house which has been sitting vacant for almost 8 years now, there are actually no issues at all with the house as it only 20 years old and well built (by ourselves), however as the heating has been turned off the amount of damp inside is quite amazing (you can actually feel it in the air) and currently controlled by loads of moisture absorbing crystal tub things that fill up in just a few weeks with water out the air.

It seems houses when not heated will naturally become damp even when perfectly sound and will be fine when back to normal temp.

[Edited on 17/12/15 by Mr Whippy]

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britishtrident

posted on 17/12/15 at 12:59 PM Reply With Quote
If I was the seller I would just say NO! and walk away, knock 3k off your offer is OK beyond that is not a good way to do business.
It would be different if the survey showed major building work was required to make the house habitable in which case you could fairly claim a a generous reduction on top of the cost for the inconvenience and disruption.





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Sam_68

posted on 17/12/15 at 01:09 PM Reply With Quote
quote:
Originally posted by Mr Whippy
It seems houses when not heated will naturally become damp even when perfectly sound and will be fine when back to normal temp.



Yep, absolutely. Warm air exerts a 'vapour pressure', which is continuously trying to push moisture from the warm side to the cold side of the structure (ie. force it out of the house).

Leave a house empty and unheated and you remove that effect... and particularly (but not exclusively) with solid wall construction in older properties, damp will be absorbed back through the wall, from the outside, regardless of any DPC.

Unless you have very a clear and localised area of damp at low level, associated with an obvious failure in the DPC, I'd be inclined to regard the whole DPC thing as a red herring.

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macc man

posted on 17/12/15 at 05:16 PM Reply With Quote
When I made an offer on my present house it had not been put on the market yet. I had a survey done which highlighted various problems but none serious. I knew if I had haggled too hard I would have lost it. It all depends on how much you want it and are willing to pay. If you have alarm bells always walk away. Good luck.
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corrado vr6

posted on 23/12/15 at 11:01 AM Reply With Quote
Hi guys, thought I'd give an update on this.

After a lot of advice taken on board we decided to write a letter to the vendor to justify our reasons of our lower offer, we gave this letter in a stamped envelope to the estate agent to pass on. We were told the next day that our offer of 195k had been declined (so we knew the estate agent hadn't posted our letter as requested) and that the seller had said that if 200k could not be met then the property would be put back on the market that evening. We stalled slightly and later offered 197,500k as due to the retention this was every penny we could get together and not us being difficult. Today we had a phone call to say this offer had been accepted so long as we press on to push the sale through.

I really feel that we have all reached a good compromise and just hope things go very smoothly from now on, just got to press on with the mortgage now!





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