If you were a vendor
Would you reduce your price if the house was a lemon?
, Nov 21 2012 09:45 PM
10 replies to this topic
Posted 21 November 2012 - 09:45 PM
I'm in a situation where I will be pulling out of a sale due to the results of a building inspection. I will be looking at a minimum of about 30-$40,000 on repairs.
Some are major like foundation work, new drainage, plumbing etc.
This house will no doubt be hard to sell unless the price is reduced.
Have you ever chosen to reduce your expectation as a vendor due to major issues found on your property?
Or would you stay stuck with a lemon that doesn't sell due to major issues and refuse to reduce your price?
Edited by paula1, 21 November 2012 - 09:54 PM.
Posted 21 November 2012 - 09:57 PM
Sounds like you are buying the place I sold last May.
We had a lemon. We had our base price that we couldn't financially afford to go below. We advertised high knowing that the price could always come down, but never goes up. We were lucky. We had two potential buyers, a builder who was going to offer $150 less than advertised price, and the eventual buyer who didn't get a building inspection and bought for $40K less. We would have sold to the builder for what he offered if the buyer hadn't counter offered what they did.
In your case, don't assume the vendor doesn't already know the condition of what they are selling. It may be the reason for the sale.
Posted 21 November 2012 - 11:00 PM
We just sold a lemon. Only found out from a buyers building inspection (they pulled out), we approached the other interested buyer who we had refused for the ones who pulled out. We dropped the price by $5k (but had already dropped it by $10k over three months), she had got a quote for repairs $20k (asbestos removal).
We knew something was up because it took five offers to finally sell.
We considered keeping it because it was so hard to sell, but now I am glad it is gone, it's her problem now to consider resale values etc. Monkey off our back (we would have rented it out)
You can always over think these things, keep it, rent it, sell it, we lost more money than we think we should have but at the end of the day we came out with a profit and don't have a rental in another country. The problem was never going away and the value would always reflect that.
On my street I have three houses for sale, all overpriced - $100k overpriced. We are watching with interest but it seems ridiculous to me that agents let them put these prices up in this ecomony.
Posted 22 November 2012 - 09:11 AM
Thanks guys, I'm pulling out today.
Even the bank valuation wasn't satisfied.
Posted 22 November 2012 - 09:28 AM
Depends on who's doing the building inspection. When we sold our previous house (1960's double brick house set over garage, steeply sloped block), the buyers had a pest inspection mob do the building inspection as well. They were hopeless....it was all tick the box stuff, with disclaimers that they weren't experts and a professional plumber/builder/electrician/engineer etc should be employed for an accurate assessment.
The lower part of the house had surface cracking in the mortar on the outer layer of bricks but it didn't go through to the inner wall. It was pretty obvious that it was cosmetic only and of no consequence. However, the pest/building inspectors advised an engineers report, and the buyers squealed and carried on about structural faults and integrity of the foundations and wanted the price reduced. Mind you, the report also advised a plumbing report in regards to a rusty downpipe, an electricians report for some untagged electrical work and a plasterers report on a piece of wonky plastering in the laundry.......but none of that was mentioned by the buyers.
We got an independent builder to come in and do an inspection and write a proper report, and didn't reduce the cost at all.
They still bought it. And they still own it.
Posted 22 November 2012 - 09:37 AM
If I was the vendor I would probably already know all the problems with the property and would have priced it accordingly so no, I would reduce the price.
Posted 22 November 2012 - 10:22 AM
It's a deceased estate and the daughter is selling it.
Got a call from the broker this morning to say that basically the bank valuation was also a problem as whoever did it also noticed the problem and it would need further investigation.
Posted 22 November 2012 - 10:31 AM
The buyers of our house also wanted the price reduced because it didn't have a split system and they wanted to add one. We pointed out it had never had a split system, it wasn't like it had one and now it didn't work, it had never had one in the first place.
Then they wanted a reduction because the concrete ramp going to the backyard had no handrail and they would need to get that added to bring it up to specs for renting out. We pointed out we weren't renting it out, we were selling it and if they wanted to rent it out it wasn't up to us to meet the costs to bring it up to spec.
Posted 22 November 2012 - 10:36 AM
If the bank isn't happy then I would say RUN! Which you are. Sounds like you've dodged a bullet on this one...
Posted 22 November 2012 - 11:23 AM
If the bank isn't happy then I would say RUN! Which you are. Sounds like you've dodged a bullet on this one...
I agree. I hope your perfect house comes up soon!
Posted 22 November 2012 - 12:24 PM
As a vendor if you have a choice then hold on to it and rent it out and use it as collateral for another home. After awhile and you have the means to do so - level it and sell it as a vacant lot or if you can afford it build.
You are better off hanging on to a lemon as a rental because you are never going to make money on it selling it and it will just bleed you dry should you try and do it up.
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