For Brisbane homeowners, taking out Brisbane home loans to purchase a home may be the biggest investment you’ll ever make in your lifetime. But do you know that negotiating house price after inspection of the building is something you can do to mitigate the staggering costs of a home purchase?
Median dwelling values across all Australian capital cities reached over $700K+ in May 2023. This is a massive financial venture for any first home buyer or investor. So before fully committing to buying a house, it’s crucial to know for certain that the home you intend to buy is structurally sound and doesn’t have any significant issues.
This is where a building and pest inspection or pre-purchase inspection comes in. By ensuring a building inspection is done before finalising your purchase, you’ll know if there are existing problems with the property and have a renegotiation tool you can leverage.
Can you negotiate house price after inspection?
Yes — in fact, this is a common concern among many Australian home buyers. It is possible The purpose of a home inspection is to identify any issues or defects that may affect the value or condition of the property.
If the building and pest inspection Brisbane report reveals significant problems that were not previously disclosed or accounted for in the initial price negotiation, you can use this information as leverage to renegotiate the price.
Negotiating Price After a Building Inspection: what are its benefits?
Negotiating the price after a building inspection can offer several benefits to the buyer:
Uncover any hidden or undisclosed issues with the property
By renegotiating the price based on the inspection report, the buyer can ensure a fair and transparent transaction. It allows the buyer to address significant defects that may impact the property’s value or require costly repairs.
Obtain financial protection
If the inspection reveals substantial issues that were not previously known, the buyer can request a price reduction to account for the cost of repairs or future maintenance. This can help prevent the buyer from shouldering the full financial burden of unforeseen problems.
Get some valuable negotiating leverage
Armed with the building and pest inspection report, the buyer can present a compelling case for a price reduction or repair credits. This strengthens the buyer’s bargaining position and increases the likelihood of reaching a favourable outcome in the negotiation process.
Gain peace of mind knowing that you are making an informed decision
They have a clearer understanding of the property’s condition and can factor in the necessary repairs or improvements when assessing its overall value. This can contribute to a more confident and satisfying homebuying experience.
The benefits of negotiating the price after inspection may depend on the specific circumstances and the willingness of the seller to accommodate the buyer’s requests. Engaging the services of a knowledgeable real estate agent or mortgage broker can help ensure that the negotiation process is handled effectively and in compliance with relevant laws and regulations.
How to renegotiate the price after a building inspection?
Let’s say you already have the building inspection report on hand. How do you go about negotiating the property price after that building report? As a mortgage broker, Brisbane locals have come to trust and has successfully helped hundreds of buyers purchase a home, we’ve found the following tips to be crucial in the renegotiation process.
1. Get the problems and numbers straight
Check the building inspection report and take note of any urgent major concerns and smaller items that require monitoring.
Discuss any priority problems with the inspector and list them down. Then, make the necessary enquiries and ask for quotes for the required services to fix such issues. These can include termite extermination, plumbing system replacement, structural repairs, etc.
Armed with information and calculations, you can confidently sit at the negotiation table and start negotiating the house price.
Prior to renegotiation, speak with your agent to see what types of concessions are possible under similar circumstances. Your agent can also advise you on when it’s best to be assertive and when you should be willing to compromise or let go. It’s important to get independent advice – don’t rely on the seller’s agent advertising the property… they work for the seller, not you.
2. Negotiate with an open mind and try to be flexible
Instead of focusing on winning the renegotiation at all costs, approach the negotiating table with an open mind and a desire to collaborate.
Of course, your ultimate goal is to drive down the cost of the property. Present the building inspection report and emphasise the major details, including information on areas of concern and the quotes you received.
Be ready to compromise over certain things, especially minor issues.
3. Be ready to walk away
Before renegotiation, you should already know the extent to which you’ll be willing to compromise and when you’re likely to abandon the sale.
If the seller is unwilling to renegotiate over high-priority concerns even when there’s proof presented to them, then you should be ready to cancel the sale.
Even if you’re head over heels in love with the house, knowing it’s a lemon right away gives you a chance to re-evaluate your choices and walk away.
4. Negotiate a price concession
If the seller is willing to renegotiate, then it’s time to ask for a financial concession, which can come in the form of a lower sale price or a credit at settlement.
When you have looming repair expenses, a credit at settlement can be a better alternative as it ensures you have the cash to pay for major repair works.
Is withdrawing offer after building inspection an option?
Yes, you can choose to withdraw your offer if you are not satisfied with the inspection’s results. Before you do, you must review the terms and conditions of your purchase contract, including any contingencies or clauses related to the inspection.
Consider the severity of the issues identified during the inspection and whether they justify withdrawing the offer. Significant structural problems, safety hazards, or major system failures may be valid reasons for withdrawing, while minor cosmetic issues may not carry the same weight.
If you decide to withdraw your offer, promptly communicate your decision to the seller’s solicitor in writing. Clearly state your reasons for withdrawing, referencing the inspection report and specific concerns. Open and transparent communication can help avoid misunderstandings and potential disputes.
Most importantly, be aware of any financial implications associated with withdrawing an offer, such as potential loss of deposit or fees already incurred in the process. Consult with your legal advisor or mortgage broker to understand your financial responsibilities in case of offer withdrawal.
Have the house of your dreams with NBHL brokers!
Buying a home is part of the Great Australian Dream; still, you need to ensure you’re purchasing a property at a fair price by getting a building inspection done. We are seeing many clients trying to secure property in this highly competitive market and it can feel overwhelming to lose a property when doing your due diligence. Our top tip is to not skimp on your building and pest inspection Brisbane in order to secure a house that might be hiding major problems.
Negotiating price after a building inspection is much easier with a professional mortgage broker by your side. Plus, you’ll have your finance ready to go for the right property. Our team at North Brisbane Home Loans is ready to help you get finance pre-approval so you can confidently make offers and if needed, negotiate any price reductions. Get in touch with us today.