Asking Vendor to drop price

Hi:-

We're sale agreed at EUR322,000 and have discovered, after a survey, that the place needs more work than we'd thought.

We're still waiting on our builder to come back with a quote, but depending on what he says, we may need to ask the vendor to drop the price to EUR317,500 to help pay for the essential renovations.

Our broker, the builder, our friends - everyone has suggested asking the vendor to drop the price slightly in light of these unanticipated extra expenses.

We're first time buyers, so the vendor's dropping the price EUR4,500, or 1.4%, would save us around EUR14,000!

So - does anyone have any experience of doing this? My instinct would be to be to explain our position, and then give them a tight deadline to respond - and be prepared to walk away if it goes wrong... One sale has already fallen through, and the property has been on the market for a couple of months - so perhaps the vendor, an investor, would be glad to just close the deal... But it's starting to look likely that we can't afford the renovations without doing this... The question is how to proceed...

Any insight or advice would be most welcome! Thanks in advance, as ever.

simp said:

My instinct would be to be to explain our position, and then give them a tight deadline to respond - and be prepared to walk away if it goes wrong.

Click to expand...

Thats it in a nutshell.

If you really want the property then I would play it a bit less drastically. I guess it would help to accentuate the positives for the vendor attributable to them dropping the price - e.g. a quick sale with no hitches to a guaranteed (I presume) buyer? A bit of salesmanship to spin the quid pro quo for a price drop in the most favourable light to the vendor might be in order. Some people are better at this sort of thing than others (e.g. I'd be crap at it myself).

Thanks for your swift replies.

Yes, ClubMan, I would emphasise the positives - that we would ensure a quick sale, that the reduction is not that drastic, and that it would enable us to do a great job on the house - and that failing that, we would probably not be able to afford to take on the project, and thus the house.

Also, since we pulled out on the basis of structural defects discovered during a survey, the estate agent would have to mention this to subsequent prospective purchasers - would she not? Which would make the house more difficult to sell on... Which would make them more likely to negotiate. Am I correct in thinking that the estate agent has to do this?

simp said:

Also, since we pulled out on the basis of structural defects discovered during a survey, the estate agent would have to mention this to subsequent prospective purchasers - would she not?

Click to expand...

An ethical one would have to mention it , yes, if asked straight out . The estate agent acts for the vendor not for you of course.

Structural problems ...unlike a 'bit of damp' , are costly to fix. Do you have a fixed price quote for the repair ??

Well, there are no huge structural problems, but there is a 'bit of damp', which will mean replacing sections of the front wall, some of the inside walls, and the guttering; also, an inside wall is coming away from its pinning slightly, which will need fixing.

The builder is working on a quote at the moment... It will be a rough quote for now... But I'm thinking that this could be high-ish...

So I think we're justfied in asking for a slight price adjustment?

Just be careful that you don't buy a load of expensive structural problems. If the remedial work is within your budget and of a "reasonable" cost then it might make sense to attempt to negotiate. However if there is a risk tha t this work might be very expensive and beyond your budget (and in excess of any reduction in purchase price that you can negotiate) then you might want to think twice before proceeding. Has your surveyor estimated the cost of remedial work so that you can sanity check the builder's quote against this figure? Have you shopped around for a few quotes from different builders?

Do not forget that the vendor would have no problems if they had another buyer and wanted to increase the sale price so you should have be the same when negotiating for a reduction in prices because of the major structural repairs. Also it has cost you to get the survey done so you should also take into account during your negotiations.

Good luck

RR

We are having similar problems with a vendor. Surveyor has indicated that there is definitely room for negotiating. I have been fair and reasonable with EA up till now but he and/or the vendor refuses to budge. I am slightly unsure how to proceed now, although my initial instinct would to walk away.

Any further advice would be greatly appreciated )

As usual some very helpful advice. The vendor is likely to resist unless there is a 'structural' problem. You lose nothing by asking, but you should perhaps in return give a better closing date. It also depends on whether there is a mystical 'other' buyer in the wings. If an auctioneer is involved, there might be ! Best thing is to decide your strategy and if you are prepared to walk then go for it.

Do nothing until you get a quote from your builder. We had a similar situation and negotiated €15000 reduction as a result of our survey. What we asked the vendor for was a fair contribution to the works required - which cost us €30k. We were prepared to walk away - which became apparent when we resisted vendors resistance to contribute. We gave a deadline - and refused to budge one inch on the amount. Vendors would always be anxious about surveys and what they might throw up. They will be aware of problems in the property that need to be rectified.

just went through same situation today

Surveyor (very thorough!!!) quoted 35k for repairs and improvements. A big chunk of that was for new windows and external doors which we'd budgeted for, changing driveway/footpath. Nearly died of shock when we saw the figure though!! Nothing too serious wrong structurally (bit of money to fix up badly done job covering flat roof extension) but because it's an old house (circa 50s) there's lots of bits n pieces to do (gutters etc) we didn't account for. This is a house we'd regard as having a very good finish (having seen 50+ ex corpo houses in dublin over last year) so hard to imagine how much money a house in dire state would cost!

Went back to the EA for renegotiation yesterday. Sent on a copy of report etc. Asked for 10k or we'd have to reconsider our options. No way were they budging. Said house would go back up for sale tomorrow if we were no longer interested. Tried to wrangle it down to money for fixing up the flat roof. Still no go. In the end we gave in
Maybe they would've come up with the goods if we'd the guts to walk away but having spent a year trying to buy (and trying to avoid stamp duty - no luck there) I guess we're reluctant to take the chance of losing it all over a few thousand now when we've seen how not taking the plunge sooner has cost us..... if only we could buy now at last year's prices!

If you're willing to start the search again then hold out for your renegotiated price. It'll probably bug me forever wondering whether or not they'd have come running back with their tail between their legs if we followed through and pulled out. Good luck!

As an investor if I was selling I would probably tell you both to take a hike.

However if I was in your shoes I would probably let it be known to the vendor (if they are an investor) and a 10k reduction in the price will reduce his CGT bill by 2k. There can also be other savings (in some cases the legal fees my be slightly reduced). Also a more significantly if the property is going empty without rent while the sales campaign is restarted - ouch , that's painful!

So to reiterate I would put the ball back in your court and tell my brief to insist that you have 2 weeks (or whatever) to exchange contracts. But if you are prepared to walk away then you should consider some of the points above.

Roy

Just reading this revived thread with interest, and realise that I didn't report back on how we got on...

When I finally approached the EA for a reduction, she laughed and said that I was getting a bargain, and that she would realise 10% more if she put the house back on the market. Which, crazily enough, based on anecdotal reports, would seem to be the case. So we went with the original price, and will absorb the stamp and the renovations...

It's terrible that vendors can get away with that attitude - but, for the time being, it's still a seller's market. Certainly there seems to be real shortage of houses, around the 317,500 mark in Dublin so people are getting away with murder, and buyers are resigning themselves to it in the hope that prices will continue to rise...

simp said:

Just reading this revived thread with interest, and realise that I didn't report back on how we got on...

When I finally approached the EA for a reduction, she laughed and said that I was getting a bargain, and that she would realise 10% more if she put the house back on the market. Which, crazily enough, based on anecdotal reports, would seem to be the case. So we went with the original price, and will absorb the stamp and the renovations...

It's terrible that vendors can get away with that attitude - but, for the time being, it's still a seller's market. Certainly there seems to be real shortage of houses, around the 317,500 mark in Dublin so people are getting away with murder, and buyers are resigning themselves to it in the hope that prices will continue to rise...

Click to expand...

thats it in a nutshell, the mythical 317500 mark is the killer, i cant afford to go over the mark, the stamp duty would kill me, and as a FTB, even if i could afford it would aggrieve me greatly to give 3% to the government, money when it can be avoided.

Our only consolation is that, having sale agreed in early Dec - based on the PTSB house price index - the house has probably increased in value by at least 3% since then. Which is a ridiculous way to justify it to oneself, but hey - it works.

And whatever about the mess created by FF's abolition of stamp for FTBs under €317,500 - now FG are proposing abolising stamp for FTBs under €400,000... Which seeems to me would have a similarly counterproductive
effect... Don't get me started...

Good luck with your househunt, Odon!