Building inspection-does seller need to make repairs

[Shmicho]

Just wondering, we are selling our house and buyer wants to do a building inspection, which is fine we did too when we bought this house but do you know are we obliged to make any repirs that they might ask us to do eg, fix leaky gutters, and if we don't are they then able to get out of the contract.

They have put in a low offer and won't budge and I'm worried that if we accept we might end up being really out of pocket as we are trying to buy a house subject to the sale of this one and money is tight..!

 

[HotRod]

Just wondering, we are selling our house and buyer wants to do a building inspection, which is fine we did too when we bought this house but do you know are we obliged to make any repirs that they might ask us to do eg, fix leaky gutters, and if we don't are they then able to get out of the contract.

They have put in a low offer and won't budge and I'm worried that if we accept we might end up being really out of pocket as we are trying to buy a house subject to the sale of this one and money is tight..!

If it is that low, don't accept it.

Also, YOUR agent should put the conditions in YOUR favour.

Generally, the building report should only highlight structural defects, not leaky gutters or flaking mortar etc. If there are things required then you need to rectify of renegotiate the price.

I take the view as a buyer that I pay the full price with my conditions or no conditions and my price. As a seller youwould want full price and full conditions to then be able to negotiate either the price down or conditions out until acceptable to both parties.

 

[Propertunity]

....do you know are we obliged to make any repirs that they might ask us to do eg, fix leaky gutters,

No you are not obliged to do anything. However, as BAs we regularly go back to the vendor to renegotiate the price down to account for things we may not have known about, that the P&B reports have revealed. Either that, or we ask the vendor to fix at their own expense. If it is really bad, we might collapse the sale and buy something else.

....and if we don't are they then able to get out of the contract.

It depends at what point the sale is up to. Are the contracts unconditional? If not, then they can pull out or do what I've said above.

 

[wylie]

Building report is to find issues that make the house structurally unsound. It shouldn't include things like holes in gutters etc.

Of course, some people will try to bluff the vendor and threaten to back out of the contract, but if the clause is written in such a way that the building report is for structural issues they "should not" be able to back out for piddling stuff.

Be prepared though. We once had a building inspection show up that there was a "risk" termites could enter the stumps "at any moment" and the barrier would cost $5K. Our termite chap would do it for less than $2K if they wanted to pay for it themselves, but we told them there was no evidence of termites "at this time" and they could basically "go whistle". (Purchasers wanted $5K price reduction.) We stood firm and they backed down.

Another time as vendors we dropped $2K from contract price because we really didn't want to miss out on buying another house with two other parties waiting for our contract to fall over, so we gave in and dropped $2K.

It all depends on how much you need this sale as to whether you decide to knock something off the (already lowball) offer. I say call their bluff.

 

[Shmicho]

Thanks Hotrod, if only the realestate market was a bit more buoyant and we had other interested parties that wanted to put in an offer

Trouble is we are a realestate agents dream client, we've been looking for a house to buy for ages we've finally found it and are desperate to buy it and don't want to miss out, it's going to cost us, it'd be great to stick to our guns as you seem to but we're buying our home and emotions always get in the way..

 

[Peter 14.7]

I find make a counter offer of cash. So like $2k off the price. In the end if that is the game are you willing to let another $2k go to get the sale and the new Home.

IF there more than $2k in value in the new home.

Or

Can you rent it as is and hold till market improves? Usually not advisable.

Peter 14.7

 

[M.Investigator]

You're not obliged to pay for repairs, but I suggest you just make a counter offer to reduce the price in accordance to the cost of repairs. Of course, that amount will be quite arbitrary so try to negotiate the "repairs cost" so that you still get as much as possible. Or you may like to ensure that you get a number of real quotes from tradespeople to know for sure what the cost would be.

That's the best way for you to make the buyer happy but still not have to pay for the repairs yourself out of your pocket right now.

 

[Scott No Mates]

Thanks Hotrod, if only the realestate market was a bit more buoyant and we had other interested parties that wanted to put in an offer

Trouble is we are a realestate agents dream client, we've been looking for a house to buy for ages we've finally found it and are desperate to buy it and don't want to miss out, it's going to cost us, it'd be great to stick to our guns as you seem to but we're buying our home and emotions always get in the way..

Is the selling agent of the house you want also your agent? If so, they are trying to close 2 deals, yours & yours. Their commissions revolve around your decisions so they will work hard to get you to close on the purchase (get you committed) then apply even more pressure to accept the conditioned lowball offer. If they aren't the selling agent for the other property, then they will just try to get you to accept the lowball offer - play hard, give something away (eg you will fix x but not offer a discount) or take it off the table, the buyer is already on the hook how you play it is ultimately up to you.

As for the building report, it is there to paint a picture for the buyer. It shows the property warts & all - if there is anything amiss then they have to put it out there with flashing lights (their insurers want everything covered in their disclosures).

 

[Jtkumnick]

From what i have seen of several hundred building inspections- they are **** covering for the building inspector first and foremost. They inspect the property, most properties are generally ok, and then they give the report to the buyer that has 2 pages of report and 40 pages of legal disclaimers.

Buyers solicitors OFTEN use the building report as a way to negotiate down after contracts have been done. Be very wary. Im not sure about SA but in QLD the standard contracts state that "b&p to the buyers satisfaction"......

I agree with the people above, if the buyers pay the price they want, the terms at least should be in your favour.

PS if SA contracts are like QLD, get your solicitor to insert a clause that stipulates what they can and cant pull out with ie:
* structural damage
* undisclosed damage over $10k
*Active white ants in the DWELLING (not fence or gardens) etc

Your soli should have some clauses to tighten up the b & p.