How to Renegotiate the Price After a Building Inspection?
Purchasing a home may be the biggest investment you’ll ever make in your lifetime. And this isn’t a remote possibility, as median house values across all Australian capital cities reached over $1 million in December 2021.
Before fully committing to buying a house, it’s crucial to know for certain that the home you intend to buy is structurally sound and doesn’t have any significant issues.
This is where a building or pre-purchase inspection comes in. By ensuring a building inspection is done before finalising your purchase, you’ll know if there are existing problems with the property and have a renegotiation tool you can leverage.
Renegotiating Price After a Building Inspection
Let’s say you already have the building inspection report on hand. How do you go about negotiating the property price after an inspection? As a mortgage broker that has successfully helped hundreds of buyers purchase a home, we’ve found the following tips to be crucial in the renegotiation process.
1. Get the problems and numbers straight
Check the building inspection report and take note of any urgent major concerns and smaller items that require monitoring.
Discuss any priority problems with the inspector and list them down. Then, make the necessary enquiries and ask for quotes for the required services to fix such issues. These can include termite extermination, plumbing system replacement, structural repairs, etc.
Armed with information and calculations, you can confidently sit at the negotiation table and start negotiating the house price.
Prior to renegotiation, speak with your agent to see what types of concessions are possible under similar circumstances. Your agent can also advise you on when it’s best to be assertive and when you should be willing to compromise or let go. It’s important to get independent advice – don’t rely on the seller’s agent advertising the property… they work for the seller, not you.
2. Negotiate with an open mind and try to be flexible
Instead of focusing on winning the renegotiation at all costs, approach the negotiating table with an open mind and a desire to collaborate.
Of course, your ultimate goal is to drive down the cost of the property. Present the building inspection report and emphasise the major details, including information on areas of concern and the quotes you received.
Be ready to compromise over certain things, especially minor issues.
3. Be ready to walk away
Before renegotiation, you should already know the extent to which you’ll be willing to compromise and when you’re likely to abandon the sale.
If the seller is unwilling to renegotiate over high-priority concerns even when there’s proof presented to them, then you should be ready to cancel the sale.
Even if you’re head over heels in love with the house, knowing it’s a lemon right away gives you a chance to re-evaluate your choices and walk away.
4. Negotiate a price concession
If the seller is willing to renegotiate, then it’s time to ask for a financial concession, which can come in the form of a lower sale price or a credit at settlement.
When you have looming repair expenses, a credit at settlement can be a better alternative as it ensures you have the cash to pay for major repair works.
Have the house of your dreams
Buying a home is part of the Great Australian Dream; still, you need to ensure you’re purchasing a property at a fair price by getting a building inspection done. We are seeing many clients trying to secure property in this highly competitive market and it can feel overwhelming to lose a property when doing your due diligence. Our top tip is to not skimp on your building and pest inspections in order to secure a house that might be hiding major problems.
With a professional mortgage broker by your side, you’ll have your finance ready to go for the right property. Our team at North Brisbane Home Loans is ready to help you get finance pre-approval so you can confidently make offers and if needed, negotiate any price reductions. Get in touch with us today.