Negotiation after survey

Katie_96

My partner and I are buying our first house. After only viewing half a dozen houses, we found the right one - a 3 bedroom 1960s semi in a quiet cul-de-sac.

We didn't really want to pay more than £140,000. With a mixture of our savings, a sizeable contribution from some asbestos compensation from my granddad and another contribution from my partner's parents, we could put down £20,000 and then have an addition £5,000 to do basic renovations (new floor for health reasons, french doors for security reasons, knocking the fireplace back in),nothing major or hugely expensive.

The house was up for £144,950. We did a bit of research and the sold house prices on the street were all over the place. Next door which was in a similar dated condition sold for £130,000 in September, but a house further along the street sold for £147,000 a couple of years ago - though it had been modernised. We initially offered £135,500, which was rejected and were told the vendor didn't have a specific figure in mind, but definitely wasn't going under £140k since it had only been up for a few weeks and had lots of viewings. We went up to £143, which was rejected, then £144. There were multiple people having second viewings and we didn't want to lose it - it had been so hard to find something that fit our criteria and I still haven't seen anything online that is as good.

As a result of having to go up, we had to put £25,000 down and go into our savings to do the work we want to do immediately.

We got our report back yesterday and there's a fair bit of red on it. Some of it actually probably is fine. There was an issue with the electrics, but it doesn't need a re-wire and the problem that is there can be sorted out by my dad who is very helpfully an electrician. The big ones are related to the chimneys. One is possibly unstable, but I'm less concerned about that - if it falls downs, it's shared with next door and buildings insurance can cover that. The other rear chimney breast is more of a concern. The chimney breast was removed downstairs, in the kitchen, but not further up the house. My dad's gut was it's probably okay. The kitchen is about 15 years old and the chimney breast would have been removed at that point, or before and if there was sagging, we'd see it - but we need a builder to have a look. We've forwarded it to the builder that did the work on my partner's parents' house and he said if it is an issue, it would likely cost around £2,000, but he'd need a look to see if it is a problem and to give a proper quote.

If there is a problem and it will cost at least that much, I don't think we can afford to.

I have emailed the estate agent and forwarded her the survey and said she can send it to the vendor. I've asked if the vendor is willing to do the work now, if it does need doing, and if not, would he be willing to drop the price to cover the cost of us doing the work.  The response this morning was "The vendor has agreed for you to arrange for a builder however he has indicated that he won't be looking to negotiate depending on what they come back with"

The response doesn't sound particularly positive, but what do you think the chances are? Especially with him being so stubborn with the price initially and it was valued at £144,000 - what we're paying.

Side note: The minor things we wanted to do came up as things that needed doing in the survey (bar replacing the carpet with hard floor - but I need that for my asthma).


Edit: 
Reasons why I would drop the price (likely only by around £2k) if I was the vendor:
1. The sale will probably actually fall through if I don't. 
2. There are costs associated with the sale falling through and money I would have already wasted with the buyers.
3. First time buyers are the easiest to sell to and the next offer might not be from a first time buyer
4. The offer that was accepted was only £950 below the asking price and £14,000 more than next door sold for 5 months earlier
5. The next buyers will likely have a survey and get the same results and be put off by the same things, and more. The next buyers probably won't have a close family member who is willing to sort the dodgy electrics out for free. 

Update: 
My partner's mum has been onto their builder who did all the work in their house. He said the best thing is to remove the rear chimney completely to prevent future problems, but it wouldn't be a big job, but yet to get an actual price on it. I'm really hopeful that it isn't going to be as much as we initially thought and a family member will take pity on us and loan/gift us the money to do it and/or we can hold off exchanging contracts so we have two months between our last rent payment and first mortgage payment (saving about £500, which really helps).

akwexavante

A vendor can simply say that they are not prepared to negotiate further on price.  Full Stop, no reason required.

It doesn't matter why or whether a price reduction is justified or not.  It's not unusual for a buyer to try to negotiate a lower price for all sorts of reasons, but the vendor can choose whether to lower a price or not.  An agreed price is negotiable at anytime until contracts exchange both UP and DOWN by both parties!!

Don't give in, justify as far as possible and honestly why you want to renegotiate the price and see what happens.  Being honest about it is important, a vendor can decide to not sell a property to a buyer and put it back on the market if they feel that the buyer is dishonest, too aggressive  and for all sorts of other reasons too..... just because.

In the end successful or not you'll need to decide whether you like the property enough and or whether you can afford it or not.

The vendor DOES NOT care about your personal reasons for this that or the other, health issues or where your money is coming from to buy the house.   A vendor wants to sell for the higher price, the buyer wants to buy as cheaply as possible.   Neither parties are obliged to enter into a process of renegotiation for whatever the reasons may be.

Mutton_Geoff

Katie_96 said:

got our report ... big ones are related to the chimneys. One is possibly unstable, but I'm less concerned about that - if it falls downs, it's shared with next door and buildings insurance can cover that

That is a strange attitude to have. Buildings insurance is not there to cover you for risks that have already been pointed out to you. A claim under those circumstances might even be considered fraudulent.

As for the price, the vendor is not obliged to pay any attention to your reports or personal valuations of their house. The market will decide what it's worth and you are in competition with other interested parties so it is you and they that will determine the "value" of the house with your offers.

TBagpuss

What did the survey say the house was worth as is? If they valued it at less than your offer then you can use that to try to negotiate - if they didn't, then the fact that you may have to spend more than you originally planned t get the house into the condition you want doesn't mean that it was overpriced. 
I would also be very cautious about assuming that insurance would cover the chimney if anything happened - if you were aware of a risk and failed to deal with it then you might not be able to claim. 

Katie_96

The vendor DOES NOT care about your personal reasons for this that or the other, health issues or where your money is coming from to buy the house. 

The health reasons I mentioned were for the benefit of those reading this, not the vendor. I didn't want people to read this and think we would be spending unnecessary money ripping carpets up immediately when we don't have to. 

Katie_96

Mutton_Geoff said:

Katie_96 said:

got our report ... big ones are related to the chimneys. One is possibly unstable, but I'm less concerned about that - if it falls downs, it's shared with next door and buildings insurance can cover that

That is a strange attitude to have. Buildings insurance is not there to cover you for risks that have already been pointed out to you. A claim under those circumstances might even be considered fraudulent.

I initially thought it wouldn't be something we could claim on insurance, but a builder (and family friend) who we sent the survey to said that. When I asked about us knowing about it, he simply said they don't see the report. Then multiple family members said the same thing. I had the same instinct as you, but literally everyone else has said the opposite. 
However, that front chimney is a shared one with next door, so if it did fall down, and we couldn't claim it for whatever reason, at least the costs would be split. Far more concerned with the rear chimney. 

Katie_96

TBagpuss said:

What did the survey say the house was worth as is? If they valued it at less than your offer then you can use that to try to negotiate - if they didn't, then the fact that you may have to spend more than you originally planned t get the house into the condition you want doesn't mean that it was overpriced. 
I would also be very cautious about assuming that insurance would cover the chimney if anything happened - if you were aware of a risk and failed to deal with it then you might not be able to claim. 

Valued at £144,000 - which is possibly reason for him not to negotiate a penny. 
My hope is that he can be convinced that we literally can't afford to do the work and therefore would have to pull out (which would cost him money anyway). I've got spreadsheets with the costs of the things we were planning on doing anyway which show how little we have leftover - tempted to ask the estate agent to forward him them so he knows holding out won't actually get him anywhere. 

As for the front chimney - a builder, and then multiple family members said that if it does fall down, that's what buildings insurance is for. I've never needed buildings insurance before, so I trust what people who've had it for decades say. 

SMR710

Why would you pulling out cost the vendor money? It'll cost you money, not them. Even if they have started conveyancing on a property they want to move to, if you pull out and their vendor waits, they find a new buyer and pick up where they left off. You on the other hand start again on another property.
To be honest I'm glad you're not buying my house! Arguing over £2k for something that hasn't affected the valuation of the property wouldn't make me want to drop the price for you. And it would quite frankly annoy me if you were threatening to pull out, making lists etc. The vendor owns the house, you want to buy it. You pay what he wants or you don't get it!! Ball is in his court not yours I'm afraid. He knows from your valuation what it's valued at now so you've played nicely into his hand now if you pull out as he can attract the same price from another buyer by being sure of the value.
You comment that you're a FTB and this makes your list of why you're a 'better buyer' than someone else. Not true unless they specifically want no chain behind their buyer. Otherwise your claim is hardly worth the paper you're writing you lists and spreadsheets on. 

Katie_96

SMR710 said:

Why would you pulling out cost the vendor money? It'll cost you money, not them. Even if they have started conveyancing on a property they want to move to, if you pull out and their vendor waits, they find a new buyer and pick up where they left off. You on the other hand start again on another property.
To be honest I'm glad you're not buying my house! Arguing over £2k for something that hasn't affected the valuation of the property wouldn't make me want to drop the price for you. And it would quite frankly annoy me if you were threatening to pull out, making lists etc. The vendor owns the house, you want to buy it. You pay what he wants or you don't get it!! Ball is in his court not yours I'm afraid. He knows from your valuation what it's valued at now so you've played nicely into his hand now if you pull out as he can attract the same price from another buyer by being sure of the value.

Everything I've read online about what happens if you pull out states money is lost on both sides. Plus, the house is empty and they'll still be paying council tax on it. 
I'm arguing about £2k because it's £2k we literally won't have. If they won't/can't reduce it, we will have to walk away and rent for another six months, it's as simple as that. We can't magic £2k out of thin air. 
There were lots of other things flagged up in the survey, they were costs we could cope with, or we were planning on sorting it out anyway (e.g. the sliding doors at the back need replacing, I'd factored in costs for french doors before we got the survey back). My dad had already noticed the dodgy electrics and was happy to sort them for us for the cost of a few cups of tea.
As for 'making lists'. Because the house meant having a far bigger mortgage than what we wanted, I costed everything out to make sure it was affordable, before we put the offer in. Then when we upped the offer, I adjusted it, went into more detail, got some hypothetical quotes from a family friend who is a builder to make sure it was accurate as possible. I didn't just make a list for the sake of making a list. 

As for being 'better buyers', first time buyers generally are thought to be better buyers. My partner's parents knocked £15k off the asking price because the buyers were first time buyers and it made the process more simple. The house is also empty, so they'll still be paying council tax and bills on a house that isn't even being lived in - a quick sale really is in their interest. Then there's the dodgy electrics. A lot of buyers wouldn't even touch it if they knew what the electrics are like and would cost a lot to put right. It's not as bad as needing a re-wire, but still expensive. We don't have that worry. 

Mutton_Geoff

Katie_96 said:

Everything I've read online about what happens if you pull out states money is lost on both sides. Plus, the house is empty and they'll still be paying council tax on it. 
I'm arguing about £2k because it's £2k we literally won't have. If they won't/can't reduce it, we will have to walk away and rent for another six months, it's as simple as that. We can't magic £2k out of thin air. 
There were lots of other things flagged up in the survey, they were costs we could cope with, or we were planning on sorting it out anyway (e.g. the sliding doors at the back need replacing, I'd factored in costs for french doors before we got the survey back). My dad had already noticed the dodgy electrics and was happy to sort them for us for the cost of a few cups of tea.
As for 'making lists'. Because the house meant having a far bigger mortgage than what we wanted, I costed everything out to make sure it was affordable, before we put the offer in. Then when we upped the offer, I adjusted it, went into more detail, got some hypothetical quotes from a family friend who is a builder to make sure it was accurate as possible. I didn't just make a list for the sake of making a list. 

As for being 'better buyers', first time buyers generally are thought to be better buyers. My partner's parents knocked £15k off the asking price because the buyers were first time buyers and it made the process more simple. The house is also empty, so they'll still be paying council tax and bills on a house that isn't even being lived in - a quick sale really is in their interest. Then there's the dodgy electrics. A lot of buyers wouldn't even touch it if they knew what the electrics are like and would cost a lot to put right. It's not as bad as needing a re-wire, but still expensive. We don't have that worry. 

How do you know they are paying council tax? Some areas allow exemptions for empty properties for a period of time. As for bills, basic standby heat through the winter might only be £30 a month.

I'm not convinced FTBers are better buyers, they will not be familiar with the process, be jumpy with the progress, be stretching themselves to the limit financially read too much into backside covering surveys etc.

"Dodgy electrics" are solved by a £4k rewire. Which will add value back into the property.

Just because your finances don't allow you to buy and bring the property up to your standard does not mean the vendor has to come down to meet you.

And you're definitely being misled over the insurance covering repairs issue.

SMR710

If you don't instil confidence as a buyer to your vendor, they might make the decision easy for you by putting it back on the market.