Renovation house - renegotiation after survey

tiger_stripes21

Hi All,

We want to renegotiate the offer price after our survey, is this reasonable or likely to be accepted?

First time buyer here so learning a lot of new things at the moment. We have offered above asking price on a relatives neighbours house. We knew it was out dated and would need renovation before looking in but see it as an investment with plenty potential. We offered 4/5% above asking to stop it going to market and being advertised, offer was accepted and estate agent said its more than they thought they would get (alarm bells ringing).  

Its a bungalow without the dorma conversion. So the plan was a loft conversion/ garage conversion and back extension. 

We asked the estate agent if there was any structural issues or damp and he said no but a slight bit of damp on living room ceiling which has been repaired. I have now been in the house and had a level 3 survey done. Its a full reno job, still waiting on the full report but the surveyor came to speak to us after he had been in.

firstly, the roof needs doing immediately as its dangerous. Its leaking into the garage and cant be repaired as the slatts have gone (Spoke to a local builder who worked on it and said he refused to go back up unless the whole thing was redone). This wasn't something we were aware of so are looking to reduce as per reasonable quotes. 

Secondly, there is asbestos in the walls and celling expected given its a 1960's house. But we will have to remove due to the leaks and renovation (I don't think any plaster board is salvageable) so we cant just board over it and ignore, so this may be costly. Surveyor didn't seem concerned and told us to just suit up and dispose with the council, However I'm nervous to do this alone as my father passed from Mesothelioma.

Finally, (but probably not once the full report is back) is a small extension that was done, the surveyor has said this needs knocking down as its poorly built and the floor is 'bouncy'. We would have knocked this down anyway, but maybe wont include a price for this but wont say that either. 

Thanks for any advice on this. 

swingaloo

May not be what you want to hear but I would look for somewhere else. It will cost a massive amount to put right and you wont be able to get them to drop the price by as much as you are going to need to spend.

tiger_stripes21

Also forgot to add it needs rewiring which is okay as we thought as much. But it also needs re plumbing (boiler is okay though)

BonaDea

Pass the report to the vendor and tell them to get back in touch with you once they've got all the work done.

jonnydeppiwish!

If I were the vendor, I’d be taking the property to market and withdrawing from the sale to you. Just because you decided to over pay for the property, that doesn’t mean they will want to renegotiate. 

1960s house - likely roof will need some attention in the next 5-10 years. Leak in the garage? Not an immediate repair, and given you’re looking at loft conversion, you could do it all in one go.

Asbestos - highly likely but are you going to remove it or cover it? In most cases a skim on the plaster, or flooring over the top will negotiate most common occurrences.

Small extension the same - you’re going to knock it down anyway.

All three of these are identifiable on viewing and appropriate research.

FreeBear

BonaDea said:

Pass the report to the vendor and tell them to get back in touch with you once they've got all the work done.

If the vendor commissions the work, it is likely to be at the cheapest price possible. Any guarantees will be in the vendor's name, and may not be transferable.

If there is ever any work needed to a property, it is better for the buyer to get the work done. That way, they get to dictate the quality and also benefit from any guarantees.

propertyrental

Sounds to me like you knew it was a renovation project, and you had lots of plans to extend/re-model.

That's always going to cost, and inevitably cost more than anticipated.

You offered above asking price 'to stop it going to market' and that was a successful ploy. If you now try to renegotiate, I strongly suspect the vendors will 'go to market'.

tiger_stripes21

Thanks for the comments however the 'renovation project' was not to include the loft just yet, maybe in a few years time, if at all. It also wasn't presumed to be stripping back down to brick. A simple plastering, rewiring and kitchen extension is what was thought. We also thought we could cover the walls up and plaster over however now not so sure.

We hadn't officially viewed before offering, I actually got in touch with the Vendor asking if ever they want to sell can we have first refusal, I knew the owner had passed away and it may be being sold off which it is. I went into the house pre Covid and it was fine but since it has deteriorated. Even the estate agent and owner said get a survey done which we were and have. Estate agent said the offer is more than they thought they would get.
Not many people in the area will want this house unless they're a builder so its most likely us buying it or a builder, who will want for the cheapest price. So I think we are being more than fair.

The estate agent told me they had a leaking roof which had been repaired. However it is still leaking into the garage which is inside the house structure and due to how unsafe it is due to long term leaking no builder will touch it unless the roof is fully redone as its rotten in parts. The leaking garage ceiling is asbestos too, so I presume this cant just be left to fall apart.

The ceilings and walls I'm guessing cant be boarded over and all have to be removed (i will double check) but if so that's costly with it being asbestos. 

The shoddy extension and the fact it needs rewiring we aren't bothered about. But the fact the roof needs fully redoing is not what was expected neither is professional removal of asbestos. 

I'm looking at 10k knocking off the offer. 

tiger_stripes21

May i add that the vendors have no money to repair so that's not an option, they are retired and have inherited the house which needs to be sold and divided between beneficiaries.

Section62

tiger_stripes21 said:

...
Not many people in the area will want this house unless they're a builder so its most likely us buying it or a builder, who will want for the cheapest price. So I think we are being more than fair.

The only real way of finding out whether the price is 'fair' is for it to be marketed and see what offers come in.  For you the risk is if it goes to market it may attract interest from people less concerned about some of the points raised in the survey and therefore may be willing to offer a higher price.

Essentially you need to decide how much over the 'fair' price you are willing to go to maintain your position as the sole prospective buyer.

tiger_stripes21 said:

May i add that the vendors have no money to repair so that's not an option, they are retired and have inherited the house which needs to be sold and divided between beneficiaries.

Is there still a probate process ongoing?  If so, the executors will need to be careful in accepting a reduced offer as they may need to be able to demonstrate they have got the best price for it, especially if they aren't the only beneficiaries.

If the condition of the property is as bad as you suggest from the survey then it may be unmortgageable - in which case it may end up going to auction.  From the perspective of executors that might be the best strategy as they will know they have got the best price on the day, and won't have the hassle of dealing with buyers attempting to renegotiate and delaying the sale/probate.

If you see the property as an "investment with plenty potential" then think carefully before passing on what may be your best opportunity to secure the property for yourselves.  There are likely to be others who will quickly see the same opportunity for what it is.

FreeBear

Section62 said:

tiger_stripes21 said:

...
Not many people in the area will want this house unless they're a builder so its most likely us buying it or a builder, who will want for the cheapest price. So I think we are being more than fair.

The only real way of finding out whether the price is 'fair' is for it to be marketed and see what offers come in.  For you the risk is if it goes to market it may attract interest from people less concerned about some of the points raised in the survey and therefore may be willing to offer a higher price.

If you pay a little extra, a survey will include a valuation - This would be a fair and reasonable valuation based on local property values and condition. Whilst you may get higher offers on the open market, these offers could well be reduced at the time of exchange/completion and shouldn't be relied upon as a true value.