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Reducing an offer after survey


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Hi, I’ve made an offer on a house which has been accepted, it’s a probate/refurb/flip. It’s a cash purchase but there was a bit of a bidding war created by quite the aggressive estate agent and I think I’m paying a lot for it, the numbers only really stack up because prices in the road have snot up on the last few months. I had a homebuyers survey which raised quite a few issues I hadn’t seen including potential dry rot. I had a separate damp proof contractor report (which I paid for) and it’s only wet rot but the house has a real damp issue and needs a new dpc etc. The quote for their work is £3.5k but there’s quite a lot of other work I’ll have to do which is not included (like removing the rotten timbers) and an impact on my schedule etc. 

So I've reworked the numbers and to make the same money I have offered £8k less. The estate agent has asked to see the surveys and quote. 

So my question is would you send those through? I’ve paid for them and if the vendors reject my offer and put it back on the market they’ve got useful information which I’ve paid for. I’d also have to explain the other work and costs making up the balance (which is based on my conservative estimates) and frankly I don’t want to go into all the detail and have it nit-picked. 

Interested in your suggestions. 

Cheers

john

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My personal opinion, and I am very aware that other forum members disagree, is no, they want to see it, they pay for it. What are they effectively saying? They don't believe you? Need proof?

But then it once again comes down to how much you want this property. It's not clear from your question whether this is an investment or a straightforward home purchase.

That quote from the dampproofer - what precisely are they quoting for?

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Thanks Dennis. This is a flip. The contractor has quoted for a dpc and works related to that. The wet rot in the cellar simply means the timbers affected need to be removed and replaced and that requires a joiner. There’s also the assorted cost of improving the ventilation and then replacing some leaking guttering and down pipe. All that’s the work resulting from the damp, there is other work resulting from issues identified in the homebuyers report. 

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4 minutes ago, johnnymid said:

and works related to that.

Does that include all the re-plastering etc required? You may have guessed that I think it a tad on the high side...

What is the property? Detached, terraced, semi?

Edited by dennis hughes
Additional question
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It’s a large terraced. Yes the quote includes all replastering. I actually had an earlier quote for slightly less which I didn’t feel comfortable with (for various reasons I won’t bo re you with). I’m okay with the cost of the work, my question was really about handling the estate agent. 

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I think if you want your vendors to drop their price you may need to show them some proof - maybe screenshot parts of the survey & then the quote. I would want to see proof before dropping my price by £8k.

They should know already that they have a damp problem but maybe not the scale of dealing with it. Sending them proof shows good faith.

Good luck.

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I'm in a similar situation and I'm quite surprised that the estate agents want the whole survey and to also to know the mortgage valuation.  I would have thought these are confidential and that I should be able to negotiate without divulging these amounts.  I sent them a screen shot of the homebuyer valuation and copied and pasted my points of concern from the report rather than sending them the whole report. 

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I had this recently. I found it more advantageous to just send the whole report so they can see it in black and white. They agreed to meet 75% of the costs in my case. 

If they don't reduce the price, the report is worthless anyway, as you prob wont proceed. So may as well just send it as you will have more chance with full disclosure. 

Just my opinion...

Cheers, Mark

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I had the experience of pulling out of a sale due to, amongst other many things, a structural issue listed in the surveyor's report. They asked to see the report and I ended up sending them two or three pages out of it related to just that issue and if they wanted more, they'd have to pay me for it. Never heard anything back, so they got some critical info for free. Looking back, I wouldn't give them anything unless they paid for it, people generally won't.

In your case, I wouldn't send them any of the report unless they paid for it. If it's truely worth it to them, they will. You could show them the quote for the work as long as it doesn't have too much detail on it. Let them make up their own mind whether they believe you or not, they can either take the reduced amount or not, but if they know anything about their own building they'll know that rot/damp is entirely possibly and you're not spoofing them.

If you send them the report and quote, you have no leverage other than walking away with nothing to show for it. If there was an initial bidding war and they get to look at your report(s) for free to assess it themselves, they'll probably be fine with you walking away and likely put it up for sale again hoping another bidder doesn't do that sort of investigative work before the purchase, or if they do, then the sellers will try not to allow for as much of a reduction. If you don't share the report, the sellers can't guess how bad the damp/rot is and it'll make the decision harder for them to walk away now.

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  • 2 weeks later...

Hi all, thanks for the all the advice, I thought I'd let you know how this ended. Basically I refused to provide the homebuyers report and eventually walked away.  There was a lot of to and fro with me giving them a lot of detail together with the damp report. But when the solicitor handling the probate (who was also co-executor) asked for the homebuyers report and in particular the valuation therein it triggered alarm bells. I hadn't been bothered about getting a valuation from the surveyor but he included one and it was my original offer price. Nothing unusual there but as my reduced offer was 8k less than the valuation, I figured it wouldn't support my argument and could only possibly encourage them to hold out for a higher amount and perhaps make them think that an offer from someone else based on needing a mortgage would fly. So we parted ways. Coincidentally today's podcast about knowing when to walk away from a deal made me feel a lot better!

A learning point from me in a similar situation - cash purchase for a house needing full refurb where I decide to get a survey - would be to ask them NOT to include a valuation. I didn't need one and it would then give me the option of using the homebuyers report. I suppose the other side of the coin would be that a surveyors valuation could be lower than the offer which would support an argument for a reduced offer but then I hope I wouldn't get myself into that situation in the first place!

One other thought that since the homebuyers report is very limited in scope, when faced with need for a full refurb just how accurate is the surveyors valuation in the first place? But I'm sure thats another story. As is the temptation to think that you're in for £x spent on surveys so you shouldn't walk away - check out the sunk cost fallacy for that one!

Onwards and upwards!

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  • 1 year later...

Hi, I understand that quite a lot of time passed but maybe someone here knows if I can renegotiate the house price after the survey? I understand that my question may seem strange, but recently, because of our move, I often feel nervous and do not know what to do with it. In addition, problems at work and insomnia only worsen the situation. The only thing I've been happy about in the last few days is tellaldi.us survey. I won a $100 coupon, although to be honest, I even forgot that I filled out this survey. I don't know...am I the only one who is so nervous about moving, or have you also been anxious at this time?

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Yes, you can seek reduction.  However the vendor is under no obligation to make reduction and is within their rights to claim the defect(s) had already been considered in the valuation. 
 

I’d recommend being transparent; release the survey to them, invite them to contact your surveyor, and ideally provide 2-3 quotes for the remedial works (and if you really want it suggest a split of the costs). Being reasonable usually gets a reasonable response. 

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