Building Report Not So Good

[MickInvestor]

Hi Guys,

I was just after your view on a Building and Pest Inspection Report I just received. The report says that 11 of the concrete stumps need replacing as they are severely cracked, the shed out the back needs major renovations. the floor of the house is not level and he recommended a laser level inspection of the whole house be carried out, he said the walls were out of alignment as were the windows and the ceiling was sagging in one of the bedrooms. On a positive note there were no live termites on inspection! WOO HOO

He told me verbally that he wouldn't buy the place with even my money and I should get out now because I didn't need the hassle. He did say that the place wouldn't fall down but he said his major concern would be who would buy the house of us in the future.

You can't get much more of a negative report than that can you.

Anyone else had anything similar and does anyone have an opinion?

 

[stumunro]

You can get another opinion if you want to pay for another report, and if it comes back the same, renogiate the purchase price for the repair work, or walk away -

 

[MickInvestor]

You can get another opinion if you want to pay for another report, and if it comes back the same, renogiate the purchase price for the repair work, or walk away -

Thanks Stumunro. Some defects are repairable but the alignment of the walls and ceiling is apparently not repairable - I would think any renegotiation would be on the basis that I pay for the value of the land or very close too

 

[willair]

The report says that 11 of the concrete stumps need replacing as they are severely cracked, the shed out the back needs major renovations. the floor of the house is not level and he recommended a laser level inspection of the whole house be carried out, he said the walls were out of alignment as were the windows and the ceiling was sagging in one of the bedrooms. On a positive note there were no live termites on inspection! WOO HOO

Sounds ok to me,once you fix the stumps you fix the floor at the same time the rest is no problem,how much land does the house sit and what area..willair..

 

[MickInvestor]

Hi Willair - it sits on a bit over 600 sqm

Cheers

Mick

 

[Francesca C]

Sounds ok to me,once you fix the stumps you fix the floor at the same time the rest is no problem,how much land does the house sit and what area..willair..

Yes how much land does it sit on, can you subdivide or build a few? it does sound like the house is in a bad way.

If it is in a really good location, and it really isnt as bad as what we are thinking... why dont you get quotes for the repairs and go back into negotiations with the vendor.. if repairs are say 20k, why not negotiate the purchase price by this amount?

You could also put an extra clause that after finance is accepted and all conditions met that your tradesman has prior access to the property before settlement to fix it up... that way, you wont have to wait to put a tenant in and lose rental income.

If you can bulldoze the house down and build a few, I would still go in and renegotiate... do some number crunching! and if they dont come to the party "win, win" then walk away.

 

[lizzie]

what were the plans for the place? if it was for a reno, then i'd walk away as you can spend many many thousands (sometimes 10's of thousands) on stumping and subsequent endless repair work that doesn't add any value to the property.

if you're planning on (in the near future) bulldozing and developing, then i'd still go ahead and try and negotiate a cheaper price.

 

[Noeyedear]

Hi Mick,
In my search for an IP I came across one that would need re-stumping I was told to allow 20k not sure how accurate that was. But obviously you need to get a quote and do your sums.

 

[ethereal]

Hi Mick,

Is it an old queenslander? If so, restumping is part of the deal a lot of the time and it isn't that scary if you know what you are in for. I own 2 queenslanders and have restumped both. One, as part of a major rebuild over $100k, the other under $5k with some prep work done by us and a few days labour by an old-school builder. I think a lot of younger builders would just freak out if they haven't dealt with the older style of house before.

Restumping is not rocket science and 11 posts could be done by yourself in a couple of weeks or a few weekends, though this is only a good idea if it is to be a ppor or you have the time to do the work. And it does fix the floor not being level, though don't worry too much if it isn't perfectly level. They didn't have lazer levels in the old days. I have yet to see a queenslander that is.

You may be able to use this report as a negotiating tool. Perhaps see if you can get a quote from a house restumper so you know where you stand.

Good Luck,
Louise

 

[ggumpshots]

You must have chosen this place as there was some appeal and made an offer accordingly.
With such a negative report I would negotiate severely to reduce the price.
The report is wicked,
If you cant get a great deal then cut your losses and move on.

Of course you need to know what costs you are letting yourself in for and the opportunity cost of not being able to use the property whilst it is being repaired.

Would repair start immediately or would you be waiting ages to get stumps replaced? DO you need the hassle?
Personally I would move on as I dont have experiencing in renovation

 

[landlubber]

Crook stumps & foundations ... out of plumb walls ...sticking windows .. etc ...gee ..sounds like quite a few of our renters. But with a fresh coat of paint the tenants don't seem to notice and most of the houses will ultimately be "knocked over" anyway to use the land.

If the house is "future demo. project" it doesn't matter much.

If the house is a "classic old Queenslander" then it's all part of the character and somebody will one day restore it to it's "former glory".

BUT ..how's the block of land, the location, the suburb, the schools, the view ?? etc ..THAT'S what makes you the money.

LL

 

[wings9000]

Hi All

I've just got a poor building report too. There are severe cracks on brick works all around the walls, unlevel floor in kitchen and lounge... unable to access to subfloor so dun have any idea how many stumps need repair... was referred to a structural engineer for further review. Pest was kind of ok but require further investigation.

I don't know how much it will cost me but the location is great, 10mins walk to station, university and tafe college on a 652m2 land.. sigh.. with existing tenants giving 6% yield and potential to get 7.94% by renting out the little room...

I don't have any $ for reno works or repair, just buy and hold and wait for CG..

What should i do?

Disappointed

 

[lizzie]

depends what your future for the property is. 10mins to station, uni and tafe. big block. what is the zoning? are you going to knock down and put townhouses on the block?

my last 3 purchases i haven't had a pest/building done because the intention is the knock down. all have been rented in the meantime, no problems.

however, if it was going to hold and reno then i would give such a severe p&b a second thought. i would have to get the property at a very good price below market, as "nasty" surprises can cost many 10's of thousands.

 

[landlubber]

If you seriously have NO , NONE, NIL, ZIP spare cash for any repairs then you can't play this game. Walk away. Get some more capital behind you. No matter what IP you buy you WILL have unexpected expenses and you HAVE to be ready. To buy a "train-wreck" without adequate cash (or LOC) reserves is just inviting disaster. Sorry ! That's the real world.

LL

 

[Francesca C]

Mick

Its 600 sqm, you havent told us the zoning or your intentios when you purchased the place.

What percentage of the price is land value compenent?