Advice pls: Can you negotiate price after survey ?(13 Posts)
We have been house hunting for a long time now. Found this house which needs everything redone. But, its a nice plot, with an un-overlooked garden etc. Its a project that we would really want to take up. But, given the extent of work needed to bring it to a liveable standard, we had to be sensible about the price we offered, to leave enough money to cover the works. This was about 25K less than the absolute min the vendor would take, or at least that is what the agent told us. We upped our offer by 20K.
But, they said no and we had to leave it there. There are more viewings at the property and there is a chance that someone else might take it.
The agent told us on more than one occasion that the price can be discussed after the survey. [If we go for it, we will certainly get a full survey done.]
Is there any truth in this thing of negotiating a price after the survey and what sort of things from the survey allow you do it?
Thanks in advance
The survey will give an estimate of value, and a mortgage lender won't allow you to borrow more than x% of that value, which may force their hand?
Definitely if there were structural issues then they would be a bargaining factor. If purely cosmetic though then I would have thought not.
We bought a 1930s house and after the survey they had some work done (damp proof course improvement was one) but then we kept original offer price.
Difficult as it is obvious from the state of the house that it needs work so your offer is based on the house as seen. You might indeed get away with reducing the price later, especially if there are unforeseen items thrown up but if the seller thinks they will get more, they may refuse.
Its all sorts, actually. New windows, new doors, New kitchen, new bathrooms, new cloakroom W/c, new flooring, new heating, rewiring, re plastering/decorating: 30 yr old wall papers).
We have factored these in our price (and the price is a good 10% higher than an identical property on the same road that sold in July 2015).
But, we suspect the actual works may cost us a lot more. The vendors showed us the property. He also mumbled something about a problem with the staircase but said he had done a fix. But, not sure what the fix is. He talked about having completed a thing or two around the house and to me they looked anything but. There is some vegetation grown on the roof and even though we asked him about it, we couldn't get any more info on the state of the roof itself, than the layer on it being evergreens !!
Replacing the roof, staircase, (possible woodworm, damp that sort of thing which is not visible straightaway) are not things we have factored in our costs.
Whilst it is tempting to go with the scenario of negotiating after the survey, ...what if can't agree on a price. Then the survey costs etc would be down the drain..
We are not in a chain. They are not either. But, they are moving abroad and are keen to finish the sale quick.
It's quite acceptable to renegotiate the price after survey, but it is like a game of poker! How badly do you want it, versus how badly do they want to sell?
We've sold at our minimum price on the condition that there is no further reduction. Seems to have worked ok so far! Not exchanged yet!!
you can negotiate at any time. Before you spend money on a survey, flag up that it is clearly going to bring up the issues you've already identified, and probablym ore, and so you WILL be wanting a price reduction. And that any other buyer will want the same.
the property sounds very neglected and you could be taking on a real money pit. If the vendors don't accept that, find out now.
The difficulty that you have is that you don't know what the survey will say. I certainly wouldn't be negotiating (as a seller) on anything that was visible when you visited the property (kitchen, bathroom, wallpaper, plastering, heating, flooring etc etc). As a seller, I would say that all of that is obvious, the house was priced to reflect a buyer wanting to change all of that.
If the survey comes back and says yes it has damp, yes the electrics need to be done etc then you potentially have some comeback, but most surveys usually have a conclusion which is a fudge which says "based on my report, the valuation is at the very top end of what value I believe the property has" or words to that effect. The seller can therefore argue that the property, in its current state, is not overpriced. You're therefore unlikely to get a reduction.
What also might happen is that the survey might recommend further surveys for damp, electrics without any comment on value so you'd have to pay for those too before you were in a strong position to negotiate.
The only time when the vendor's hand will be forced is where the survey says the roof / electrics / whatever is so bad that a retention is necessary and you can argue that every other potential buyer would be in a similar position.
And as other pps say, it comes down to bargaining power - whether other buyers would step into your shoes and not be bothered about the costs, or if if it had been on the market for a long time and the seller is desperate to move etc.
I would only assume you can negotiate on things picked up on the survey that aren't obvious (such as the woodworm), but not rewiring etc as that is obvious it would need doing. So don't bump your price up hoping that you can bring it down afterwards.
I do tend to think though that houses which clearly need work doing can be good value. Our first house was 'ok' but we ended up doing new kitchen, bathroom, heating, windows, redecorating every room etc in the first few years. We knew we'd need to do some work but hadn't really thought of it as a 'project'. We would have been better off spending 30k less on a house that was clearly a project.
The agent probably just thinks that once you have paid out for surveys you won't back out even if the vendor says no to negotiation.
Great advice, thanks e'one.
We have ruled that hedging on the survey isn't a sensible option for us. But, equally, factoring in all the possible things that can go wrong (it is an utterly neglected property, for sure) will actually mean that the price we have offered is a good 10-15% higher than what we should be offering, taking into account comparable sales. So, have just called the EA and told that we won't be changing our offer.
The sellers are keen to sell. They have had other viewings since ours but no concrete offers. So, lets see how it goes.
That makes sense spg. As a seller I'd be (reluctantly) open to lowering the price for unexpected stuff thrown up by the survey - since if my buyer backs out, I'd inevitably face the same with Buyer 2 - but not rewiring etc which you'd have been expected to factor in to your initial offer.
Good decision. The trouble is that with any house you need to be building in contingency for things that the survey doesn't show up - the hidden bodge jobs, the flat plumbed entirely in not-quite-right offcuts from the previous owner's plumbing business (not bitter, not me), the damp that has been covered up at the last minute, etc etc. So it makes sense not to overextend with a house that is clearly likely to have all sorts of hidden nasties.
Just to say we have just negotiated a 3k reduction on price based on the survey so it is possible. We are also in the process of buying a place which needs a lot of obvious work (new kitchen, bathroom, electrics, boiler, plumbing etc). There was a (sealed) bidding war on the house we ended up putting in an offer 12k over the asking price, which was accepted as it was the highest. However the survey brought up some bigger issues such as damaged asbestos ceiling in the garage and lobby, Japanese knotweed on the boundary of the garden, lead pipes, damp issues and other things we couldn't have foreseen. These things would come up in other buyers surveys as well so they are still getting a good deal as we are still paying 9k over the asking price!
I think things are negotiable at all points if there are genuine reasons.
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