Can You Negotiate The Contract Of Sale After A Pest and Building Inspection?

Dilleen Property Group 2021

The answer is yes! Personally, I have negotiated properties for myself, and I negotiate properties for clients on a day-to-day basis. However, this is a common thing that people do not typically know. 

The Step-By-Step Process When Purchasing a Property

The usual step-by-step process when purchasing a property is negotiating the price of the property, signing the contract, paying the deposit, and organising the pest and building report. Pest and building reports will usually be completed the night of or the following day once you’ve organised it. The report will state if there are any issues inside and outside of the property. If you are buying an established properly, there will usually be minor issues. It can be little as cracked tiles, moisture damage (common with existing properties), usual wear and tear, or more serious issues like major structural damages. 

When negotiating a property it will always depend on what type of property it is, how good of a deal you got it for, and what state you are purchasing it in. I assist clients purchase properties in Queensland, where a 14-day pest and building clause exists. This clause allows you to organise your pest and building report, and make a final decision on the property without losing money (subject to the decision being made in the 14-day period).

It’s Important to Have The Right Team

It is important to note that it is essential for any investor to build the right team, and have solicitors that are willing to help negotiate a property for you. Your solicitor can essentially go back to the sellers solicitor with a list of issues that you would like to be fixed and negotiated for. You can say “we will go ahead with the property if x,y,z is fixed prior to settlement” or “if this is not fixed prior to settlement, we require a price reduction of ____”. In some cases the seller’s solicitor will come back and accept the negotiation terms. They also have every right to turn you down, especially if the property is a good deal and is below comparable sales. In my experience, if it is a couple thousands of dollars in minor damages, I prefer to look at the bigger picture. If its ticking the boxes being below comparable sales or below bank valuation, I do not think its worth going back to re-negotiate the deal.

Disclaimer: This is not intended as legal, financial, or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature, you should seek advice from a qualified and registered legal practitioner or financial or investment adviser.