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Building report and major structural damage...
Renegotiate the price for repairs?


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#1 paula1

Posted 20 November 2012 - 08:15 PM

I just had a building report done today for a property that i bought subject to building inspection.
It's come back as having major structural damage in one corner, it's been suggested that it will need underpinning.
I will be getting a proper quote very soon but it's been indicated that it would probably be under $10,000 as it's just one corner. Might even be closer to 5-6,000.
Obviously i'm going to try to renegotiate the price according to the quote.
If they won't then i'll walk away.

Has anyone ever done some major work after a building inspection recommendation?
I know many people will automatically just say walk away but i really love the house and area.

WDYT?

#2 Escapin

Posted 20 November 2012 - 08:21 PM

If you've already agreed a price then I'm not sure how you can just 'walk away'. That part of your post aside, we have done about $40k worth of structural work to our place. It's an 1890s terrace and we knew that we'd be up for a fair bit of work.

#3 paula1

Posted 20 November 2012 - 08:24 PM

It's subject to building inspection which was done today.
They noticed some major structural damage so that is my "out" if they don't renegotiate the price.
The building inspection was not satisfactory.

#4 LambChop

Posted 20 November 2012 - 08:24 PM

Course you can walk away, thats what 'subject to building inspection' means....

The last house I bought we fount guttering and restumping to the tune of $14k, we renegotiated to pay half each with the vendor.

#5 Escapin

Posted 20 November 2012 - 08:28 PM

Oh sorry, didn't read your OP properly!! In that case, to tell you what we did - the building report said $50k worth of work so we just offered what they wanted minus $50k. There was quite a bit of squealing from them but they agreed in the end. wink.gif

#6 cinderellainsydney

Posted 20 November 2012 - 08:30 PM

It may turn out that the building has other issues down the track. It will be worthwhile to get a few opinions.

Ive known of one contractor who writes a report and underestimates work-scope on purpose to get the job, and during the work, they can call you over and say: you can see X is now a new problem. We didn't pick up on it earlier because of Y. If you don't fix it now, it will become a nightmare, and the cost is $zz,zzz. In some cases, it will be a genuine oversight. In some cases, the new problem is caused by the renovation work itself. Either way, it can end up being only the beginning....

#7 paula1

Posted 20 November 2012 - 08:30 PM

Lambchop, I couldn't afford the hosue if she would only pay half of it. It MAY only cost 5-6,000 and if it does i'm going to ask for that much to be reduced.


#8 Fanny McPhail

Posted 20 November 2012 - 08:38 PM

The estimate may only come in at $5-6000 but I would add a contingency of at least 10% for "unknowns" especially when dealing with foundations...actually i would always add for contingencies because I work in the building industry and am married to a quantity surveyor

You don't have to tell them the actual cost and you may want to pad it a little so that you have some negiotation room. I'm not saying rip them off but make sure you are covered.

I would also get a couple of builders around to look at it and if you have a mate who is a builder get them to look at it too.

Good luck and I hope you don't have to walk away but i'm glad to see you are prepared to.

#9 bluedragon

Posted 20 November 2012 - 08:38 PM

We recently walked away from a house because of a building report. We had an offer accepted and it was subject to a building and pest inspection which found a major structural defect. In our case there were other issues and the total estimated amount to rectify was $40-45k.

When we were deciding what to do our options were explained as:
1. Walk away
2. Renegotiate the price
3. Ask for the issues to be repaired before settlement at the vendors cost.
4. A combination of 2 and 3 if only getting them to repair the major defect for example.

If you renegotiate the price you an leave the settlement price as is and the vendor can reimburse you the difference just after settlement or you can redo the contract to reflect the new price agreed.



#10 paula1

Posted 20 November 2012 - 09:01 PM

Bluedragon why did you walk away? Was it the cost?
Were the owners open to lowering the price or fixing the issues?



#11 emnut

Posted 20 November 2012 - 09:08 PM

with finances tight enough that you can only afford the house if the price is lowered to make the repairs I would be walking away.  From experience, the type of repairs you are talking of nearly always lead to further repairs being needed - such as replastering leading to repainting, flooring also ending up damaged from the repair etc.  You also don't know what impact the movement from the work will have on the rest of the house.  It will likely end up being a lot more costly than just what has been suggested to rectify the initial issue.

#12 tel2

Posted 20 November 2012 - 09:23 PM

Around 6 years ago DH & I bought a run down house on a decent lot in a half decent suburb for an excellent price. We knew it was run down and was planning to renovate it. We got the builders report back and the repairs that needed to be done to the home were close to 80K !!!! Way and truely past pur budget  sad.gif

My brother is a tradie and he told me you guys bought a lemon of a house  sad.gif He said the best thing for you to do is to live in the house and pay off your mortgage in the next few years (our mortage was really small) then knock the house down and build a new home on the old lot....and that's basically what we did.

Lots of tears and stress initially....but now we couldn't be happier  original.gif

#13 bluedragon

Posted 20 November 2012 - 09:24 PM

QUOTE (paula1 @ 20/11/2012, 10:01 PM) <{POST_SNAPBACK}>
Bluedragon why did you walk away? Was it the cost?
Were the owners open to lowering the price or fixing the issues?


In the end we decided not to even try negotiation. The most expensive part of the problems was to do with aluminium cladding over weatherboards and there was no way of telling until it was all stripped off how bad the rotting would be. My FIL is a painter and he said he's never seen a house with cladding not have major issues and the thought of the unknown was too much for us.

The agent did try to convince us to ask the vendors to fix the structural defect which was not quite as expensive to fix so I'm assuming they would have negotiated on that.

In the end it was just all too stressful, it wasn't a forever house we were madly in love with (about a 5 year house we were estimating), we weren't in a major rush to find something. Our plan was it was a smallish place that would do while DS was little and a potential second child was little too that we could pay well over the normal repayments to build up as much equity ASAP. We were concerned all the extra money we would need to pay out would offset trying to pay off extra. Not to mention the hassle of having to do major work.

So I gues the short answer is, yes, it was the money.

If it had just been to structural defect then we would have negotiated, it was going to cost around 7k to fix.

#14 The Old Bag

Posted 20 November 2012 - 09:25 PM

QUOTE (emnut @ 20/11/2012, 10:08 PM) <{POST_SNAPBACK}>
with finances tight enough that you can only afford the house if the price is lowered to make the repairs I would be walking away.  From experience, the type of repairs you are talking of nearly always lead to further repairs being needed - such as replastering leading to repainting, flooring also ending up damaged from the repair etc.  You also don't know what impact the movement from the work will have on the rest of the house.  It will likely end up being a lot more costly than just what has been suggested to rectify the initial issue.


Yes! Underpinning causes a lot of movement and usually leads to replastering, retiling, repainting, gap filling, rehanging doors....on and on it goes.

If you are not confident doing much of that repair work yourself and the budget is very tight, I'd be suggesting this is not the house for you. Sorry sad.gif

#15 libbylu

Posted 20 November 2012 - 09:36 PM

If you buy an older house you can almost expect there will need to be some structural work.  We didn't need a building inspection to see our house would need re-blocking at some point.....the floor is all over the place.  But that's what happens when it's 80+ years old.  We have lived with it but will need to re-do it eventually when we do a bigger reno.


#16 ~*hiptobesquare~*

Posted 20 November 2012 - 10:11 PM

When selling our house a few years ago the Building Inspection showed Major structural damage. Something in the range of $70,000 + for repairs.

Considering we purchased the property 2 years before and nothing of the sort came up when we got a building inspection done. We decided to get a second opinion from a Structural Engineer who came out inspected the property throughly and did a report up for us.


Luckily for us the Structural Engineer could not find any indication what so ever on Major Structural damage. And had a 13 page report to back up his findings.

It was well worth the $1,200 to pay a proper professional to come and inspect the property for us, who did not work for the Real Estate agency.

#17 paula1

Posted 20 November 2012 - 10:30 PM

I just received the formal report.

There are galvanised pipes, dirty gutters, some broken roof tiles, rotting floor in outdoor room (not sure what you'd call it), drainage issues, and the movement issue.

I think I'll keep looking! What a nightmare!

#18 bluedragon

Posted 20 November 2012 - 10:48 PM

Our structural issues were caused by drainage issues. Once the drainage issues were fixed the inspector said there shouldn't be any more issues but couldn't be 100% about it.

Again the worry of the unknown of what decades of damp soil under the house etc. might have done was too much for me.

Just beware of the agent when you withdraw from the contract. The one selling the house we withdrew from turned very nasty and threatening as soon as he worked out he couldn't convince us to negotiate. Just do everything through your solicitor/conveyancer. I had to stop taking his calls after the first two.

EFS

Edited by bluedragon, 20 November 2012 - 10:50 PM.





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