Property Purchase Deal Falling Apart!

pinklady21

Hi everyone
My friend is (or was!) about to complete on a property purchase.
Purchase price of 20k below asking price was agreed and confirmed by his surveyor as appropriate value.
Funds in place. Property requires full modernisation and price offered and accepted took account of that.
Almost at 11th hour, he realised that he had never seen the water connected and working or the septic tank working. Surveyor's report had noted that drainage should be checked.
Went last week to check it out and got a drainage expert to report on it. Report back saying drainage is completely shot and has to be replaced. Ballpark cost likely to be £20k plus VAT.
Friend has in light of this revised offer downwards by £25k expecting other side possibly to negotiate a bit.
However according to his solicitor, the other side's solicitor has "thrown his toys out the pram" and decided to remarket the property.
Apparently this is the second sale that has fallen through.
My friend still wants to purchase, but not at the originally agreed price, as the property is simply not worth it in light of problems with drainage.
Anyone else been in this situation and able to offer advice?

Alter_ego

Presumably they haven't exchanged contract? If not nobody is committed to going ahead, offers can be reduced, increased, whatever you like.
I doubt it's the solicitor's toys though.

BitterAndTwisted

The vendor is an idiot and very possibly deluded. This is probably why the past sale fell through and why every single other one in the future will too.

pinklady21

You are correct, sale not completed - this is Scotland, so we "exchange missives" and then proceed to settlement when the money and deeds are exchanged, so yes neither side is absolutely committed at this stage.

I think he would like to try and salvage the purchase, but wondering how?

He has a good relationship with the selling agent who is dealing with the solicitor, and they can't understand it either.

JQ.

I can completely understand why the vendor is upset. If I was buying a property that required complete renovation I'd have had a trusted builder crawling all over the property before I'd even had the survey. How was your friend able to accurately assess what to offer without getting a proper quote for completing the renovation?

To suddenly decide at the 11th hour to start investigating matters that would have been at the top of my priority list from the start, is not acceptable. I'd imagine the vendor has thrown their toys out of the pram becuse they feel your friend intended doing this from the outset. Chipping the price at the last minute is a tried and tested tactic of many property investors.

Too many people watching Sarah Beeny's programs and not understanding all the research that needs to go into property development/ renovations.

pinklady21

I think he did have someone 'professional' look at the actual property to assess what needed to be done and the cost, and used that figure to work out the value of the finished property and therefore the value now.
He did assume the drainage was OK though, and the vendor didn't say anything about it either.
I suppose now the vendor has been made aware of the full extent of the problem, he will have to advise any other potential purchasers too, making it even harder to sell the house.

mufi

pinklady21 wrote: »

I suppose now the vendor has been made aware of the full extent of the problem, he will have to advise any other potential purchasers too, making it even harder to sell the house.

Only if asked.

pinklady21

Wow really - I thought the vendor had a legal duty to disclose any defects they were aware of?

Yorkie1

No they're not.

pinklady21

Def a case of Caveat Emptor then!!