Should I walk away from the house after this survey report?

Physiobro

Hello all, 
I have had the survey report on a 1910 stone built semi detached house. I secured it for 15% below asking as it had been on the market for ages and it needs a full cosmetic revamp. I feel my offer was closer to the true value of the property anyway. The current owner is making a loss on the mortgage at this point but there's no chain as they've moved in with partner. We were pretty much ready to complete but the level 3 building survey report came back quite late in the process and has identified a few fairly major issues. 
1. Roof. This is visible, relatively easy to fix, had budgeted for this in my original offer. Anywhere from £1k-5k depending on how I choose to fix it. 
2. Issues relating to damp which is mainly caused by use of non breathable cement render/mortar and internal plaster when it should all be lime based on the solid wall construction. Potentially expensive to fix but I don't mind this project
3. The potential for rotting floor joists in the kitchen due to the surveyor noting bouncing and dipping of the floor. The surveyor has recommended underfloor inspection to assess the severity of the rot prior to exchange of contracts. This might also involve installing more air bricks to ventilate the sub floor and digging a trench round the front and back to move the ground away from the walls. 
Based on all this, I went in (probably too) strong with another offer of a further 5% off asking price. This has been immediately rejected and the owner/estate agents are refusing to work with me at all and won't even entertain the prospect of keeping the price as it is but completing the floor joist work prior to completion. I offered an ultimatum that the seller either funds the work for the floor joists or I get quotes and knock this off the asking price. 
I feel that the seller has their back up a little bit because they're already making a loss on the mortgage and the EA is being extremely inflexible at this point, threatening to remarket the house. 
I know for a fact that I was the only real interest that the vendor had in over 10 months of being on the market so it's not a hotly contested one by any means.
Do I walk away? 

moneysavinghero

Stand to your guns. You are the only person interested, you are the market, you set the market price. Unless you really really really want this property and will regret it for the rest of your life if you miss out on it.

SameOldRoundabout

Percentages are useless without a monetary value. 5% could be 50p or 500k. I would agree that you were very OTT knocking 5% off for some bouncy joists though, not surprised they won’t talk! 

You’re already getting it at 15% less than asking, which may be a considerable amount of money, especially if they’re now going into negative equity, if I were the seller I probably wouldn’t reduce more and would tell you the 15% covers the extra works. 

Physiobro

SameOldRoundabout said:

Percentages are useless without a monetary value. 5% could be 50p or 500k. I would agree that you were very OTT knocking 5% off for some bouncy joists though, not surprised they won’t talk! 

You’re already getting it at 15% less than asking, which may be a considerable amount of money, especially if they’re now going into negative equity, if I were the seller I probably wouldn’t reduce more and would tell you the 15% covers the extra works. 

5% being approximately 5k and wasn't solely based on the floor joists but the underfloor ventilation issues. Did also offer them the chance to fix it themselves and keep the price as it is

Jeepers_Creepers

I presume, with it requiring a 'full cosmetic revamp', the asking price had taken this into account to some degree? So when you got it for 15% below this, that's a much cheaper price than a similar property in good condition? You've done well, my son.  

On one hand, the seller (and EA) priced it hoping to take into account all the work that's required (cosmetic, roof, damp, floor...) so won't want to budge any more, but on the other, the simple fact is that no-one wanted the house for the 10+ months it was marketed, and that last factor is the one thing here that's pretty indisputable; for everyone else, it was priced too high, and no-one wanted it. Has that situation changed? I doubt it.

Do you require a mortgage on it? Ie - is it mortgageable? If not, then again that's a large factor for them to take into account - the list of buyers is limited.

Sooooo, there's a good chance that you'll get a few % off if you stick to your guns. And the risk you'll lose it - or have to start all over again.

That's a toughie.

How much of the work - roof and plaster/render - can you do yourself? If you can, and that's your intention, then doing a floor is child's play in comparison. What's more, it'll allow you to insulate and draught-proof the floor at the same time (which the vendors probably won't).

So, if this is a project for you, and one your gut says you'll enjoy and will also be financially rewarding, then I'd say "don't lose it". Ie, don't hold out for the full 5% if you think cutting it back to 3 or 2.5 will clinch it.

In the medium and longer-term schemes of things, 2 or 3 £K is now't.

Jeepers_Creepers

And I think I can say with near-certainty that the EA doesn't care what it sells for. All they want is for it to simply sell!

They probably fear that if you stick to your guns, there's a good chance the vendor will remarket it, and that's another full cycle of hassle for the EA. I mean, 5% might mean £5k difference to you and the vendor, but it means - literally - £75 to the EA! ALL the EA wants is to get rid.

I don't know if that helps to understand the situation, but you can consider everything the EA says in these terms.

AdrianC

You viewed a house knowing it's a project.
You offered on the house knowing it's a project.
You've had a survey pointing out a few things fairly typical of a project...

No wonder the buyer's said "Thanks, no thanks" to your request of a further reduction.

It's a question of who blinks first. Whether you shrug and say "£5k is small beer in what this is going to cost me", or whether they shrug and say "At least I'm shot of the money-pit..."

Sounds like, right now, they don't intend to shrug.

MaryNB

Physiobro said:

2. Issues relating to damp which is mainly caused by use of non breathable cement render/mortar and internal plaster when it should all be lime based on the solid wall construction. Potentially expensive to fix but I don't mind this project

How bad is it? I had a similar note in my report (1900 terrace house) but the damp was near impossible to spot. Tiny patches on one wall that can only be seen in a certain light. Certainly not enough of an issue to re-render and plaster the whole property. I know the previous owners used non breathable paint so I'd be surprised if they used suitable render and plaster. If I end up getting any of the plaster or render replaced I'll use appropriate materials but it's not a cheap job to do the whole lot. I've had a lot worse damp in old Victorian/Georgian rental properties and if the surveyor hadn't found damp in the house I would think he hadn't looked properly. 

My report also had similar notes on the floor, and the roof... However, it's a 120 year old house and the report did say it the issues weren't unexpected for a house of this age and type. The surveyor valued it at the amount I offered, which was a shade below asking.

Also I wouldn't ask the sellers to fix any issues noted. If it's anything like where I live they won't get a builder out in the next few months. They're so busy where I am I'm struggling to get one over just to quote. 

Physiobro

Jeepers_Creepers said:

I presume, with it requiring a 'full cosmetic revamp', the asking price had taken this into account to some degree? So when you got it for 15% below this, that's a much cheaper price than a similar property in good condition? You've done well, my son.  

On one hand, the seller (and EA) priced it hoping to take into account all the work that's required (cosmetic, roof, damp, floor...) so won't want to budge any more, but on the other, the simple fact is that no-one wanted the house for the 10+ months it was marketed, and that last factor is the one thing here that's pretty indisputable; for everyone else, it was priced too high, and no-one wanted it. Has that situation changed? I doubt it.

Do you require a mortgage on it? Ie - is it mortgageable? If not, then again that's a large factor for them to take into account - the list of buyers is limited.

Sooooo, there's a good chance that you'll get a few % off if you stick to your guns. And the risk you'll lose it - or have to start all over again.

That's a toughie.

How much of the work - roof and plaster/render - can you do yourself? If you can, and that's your intention, then doing a floor is child's play in comparison. What's more, it'll allow you to insulate and draught-proof the floor at the same time (which the vendors probably won't).

So, if this is a project for you, and one your gut says you'll enjoy and will also be financially rewarding, then I'd say "don't lose it". Ie, don't hold out for the full 5% if you think cutting it back to 3 or 2.5 will clinch it.

In the medium and longer-term schemes of things, 2 or 3 £K is now't.

I think it was taken account but I also think that the seller (sadly for her) had to cover her mortgage and she now isn't going to be able to do that. I think this is probably the main factor here. 

Yes it's mortgageable
Yeah I have been looking in to how to do lime mortar and the floor joists which honestly seems very simple so I do think I could do a lot of it myself. 
I think that's probably fair, I just don't know how much they're going to budge, if at all, from where they are now. The EA seems very sure

Physiobro

MaryNB said:

Physiobro said:

2. Issues relating to damp which is mainly caused by use of non breathable cement render/mortar and internal plaster when it should all be lime based on the solid wall construction. Potentially expensive to fix but I don't mind this project

How bad is it? I had a similar note in my report (1900 terrace house) but the damp was near impossible to spot. Tiny patches on one wall that can only be seen in a certain light. Certainly not enough of an issue to re-render and plaster the whole property. I know the previous owners used non breathable paint so I'd be surprised if they used suitable render and plaster. If I end up getting any of the plaster or render replaced I'll use appropriate materials but it's not a cheap job to do the whole lot. I've had a lot worse damp in old Victorian/Georgian rental properties and if the surveyor hadn't found damp in the house I would think he hadn't looked properly. 

My report also had similar notes on the floor, and the roof... However, it's a 120 year old house and the report did say it the issues weren't unexpected for a house of this age and type. The surveyor valued it at the amount I offered, which was a shade below asking.

Also I wouldn't ask the sellers to fix any issues noted. If it's anything like where I live they won't get a builder out in the next few months. They're so busy where I am I'm struggling to get one over just to quote. 

Sounds about right. The issue is I don't really know how bad the damp is and whether there's even any lime plaster underneath as it's all covered in horrible thick painted paper so I don't actually know the extent of the work. 
In all honesty the floor looks quite easy to fix when it comes to it so maybe I'm just letting my pride and stubbornness get in the way... 

Physiobro

AdrianC said:

 whether they shrug and say "At least I'm shot of the money-pit..."

Sounds like, right now, they don't intend to shrug.

True that but they seem remarkably unbothered by having a house sitting there for a year that they're paying to heat and have not been able to sell. Think it's probably the fact that it's not clearing their mortgage anyway