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Renegotiation Of House Price After Survey

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I have read that after a house survey it can be possible to renegotiate the sale agreed price.

To what extent is this possible?

For example, if the front window of the house is smashed, and this comes up in the survey, can this be used to renegotiate the price? Or would the seller simply say, surely you saw the front window was smashed when bidding?

Or anything else that might come up in a survey for which the seller could say that this should have been obvious.

What amounts/percentages can be negotiated off an agreed price after a survey?

Thanks.

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I have read that after a house survey it can be possible to renegotiate the sale agreed price.

To what extent is this possible?

For example, if the front window of the house is smashed, and this comes up in the survey, can this be used to renegotiate the price? Or would the seller simply say, surely you saw the front window was smashed when bidding?

Or anything else that might come up in a survey for which the seller could say that this should have been obvious.

What amounts/percentages can be negotiated off an agreed price after a survey?

Thanks.

Very much a how longs is a piece of string here. Depends on what the survey brings up. There might even be a 100% retention.

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The first and last house we brought, the banks valuers came back and said that they wouldn't lend the full mortgage because of damp etc. So reduced our mortgage by about £5k. We then contacted the vendor with the valuation results and said they would need to drop the price or we would pull out.

they dropped the price by giving us a refund on completion, which meant the full non-discounted price appeared on the land registry, but we had £5k cash back. Not sure why it worked that way, but that's how it worked at the time.

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The first and last house we brought, the banks valuers came back and said that they wouldn't lend the full mortgage because of damp etc. So reduced our mortgage by about £5k. We then contacted the vendor with the valuation results and said they would need to drop the price or we would pull out.

they dropped the price by giving us a refund on completion, which meant the full non-discounted price appeared on the land registry, but we had £5k cash back. Not sure why it worked that way, but that's how it worked at the time.

You'll have difficulty getting a solicitor to sign off on that now.

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You'll have difficulty getting a solicitor to sign off on that now.

Why do vendors do this? This sort of behaviour distorts Land Registry figures. It should be classed as fraud.

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Why do vendors do this? This sort of behaviour distorts Land Registry figures. It should be classed as fraud.

I agree it should.

New build developers do it to distort sold prices. Lenders may insist on per unit price of X they need to sell for so they do it to keep their lender happy. It's deception. I think in the past lenders were happy to do it but incentives need to be declared now in most cases.

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I agree it should.

New build developers do it to distort sold prices. Lenders may insist on per unit price of X they need to sell for so they do it to keep their lender happy. It's deception. I think in the past lenders were happy to do it but incentives need to be declared now in most cases.

Have you any examples in NI? I have not heard of any 'Cash-back' arrangements.

I do remember a development of say 20 units in which one purchaser was to win a car.

I don't believe the case mentioned above was a new build. If there was damp in a newbuild your valuer, solicitor would stop the sale. you would be mad to complete.

As you say all 'incentives' have to be declared now so you simply don't do it. Incentives would have included not charging for extras etc, things that would have increased the price above the List Price.

The Returns to Land Registry are performed by the purchaser not the developer (vendor).

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Have you any examples in NI? I have not heard of any 'Cash-back' arrangements.

I do remember a development of say 20 units in which one purchaser was to win a car.

I don't believe the case mentioned above was a new build. If there was damp in a newbuild your valuer, solicitor would stop the sale. you would be mad to complete.

As you say all 'incentives' have to be declared now so you simply don't do it. Incentives would have included not charging for extras etc, things that would have increased the price above the List Price.

The Returns to Land Registry are performed by the purchaser not the developer (vendor).

Unfortunately I'm not privy to all the new build conveyancing transactions in N.I. up to the boom. I’m sure vendor gifted deposits on new builds were wide spread enough even here.

http://www.belfasttelegraph.co.uk/life/house-home/developer-to-pay-firsttime-buyers-deposit-28388821.html

Fraser Homes seemed to pay stamp duty and deposits.

I think this developer also offered similar, though not in the link below.

http://www.wjlaw.co.uk/news/wj-law-and-halifax-to-help-first-time-buyers/

I didn't see where the OP said it was damp?

You're quite right, Land Registry are performed by the purchaser not the developer (vendor) but incentive recording was a bit "lax" up until about 2008 when a Disclosure of Incentives form was introduced. This has to be completed by the developer. Harder to hid the cash payments now.

http://www.theguardian.com/money/2010/mar/06/dodgy-games-house-developers

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New build developers do it to distort sold prices.

Its this statement I don't agree with. The purchaser will register the house at the price it was agreed at. If developers assisted with a deposit (which was rare in the boom due to 100% lending) it was to complete the sale. there was never a need to distort selling prices.

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Was momentum not an incentive/inducement - allbeit a form of insurance policy protecting the 'value' of your 'asset'?

It was not something I liked. In my view it is an incentive a guarantee that the mortgage would be lowered (max 15%) if house prices fell in the following 5 years. As the bank set it up they obviously were aware of it in the transaction.

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Its this statement I don't agree with. The purchaser will register the house at the price it was agreed at. If developers assisted with a deposit (which was rare in the boom due to 100% lending) it was to complete the sale. there was never a need to distort selling prices.

You maybe disagree, but the practice is well documented. Plenty of articles from local and nation newspapers, brokers and builder’s websites etc. on the topic.

A quick google will get you the info. We’ve already established that local builders offered various incentives and recorded a different price on the LR. In effect selling for less than the recorded price.

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I have read that after a house survey it can be possible to renegotiate the sale agreed price.[/size]

To what extent is this possible?[/size]

For example, if the front window of the house is smashed, and this comes up in the survey, can this be used to renegotiate the price? Or would the seller simply say, surely you saw the front window was smashed when bidding?[/size]

Or anything else that might come up in a survey for which the seller could say that this should have been obvious.[/size]

What amounts/percentages can be negotiated off an agreed price after a survey?[/size]

Thanks.[/size]

You can re-negotiate the price for any reason you like, if you make an offer and it's accepted, it's not set in stone until you exchange contracts. Best to make clear your offer is 'Subject to Contract/Survey' though.

If you have a homebuyers or structural(building) survey, it should include an estimated cost of putting right any issues found, which you can use as a price negotiating tool. If a lot of serious issues are found that might need more investigation you might even want to negotiate more off the price than the survey suggests. Any issues not declared by the seller are fair game for re-negotiation if they are picked up on the survey or on a later viewing.

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You maybe disagree, but the practice is well documented. Plenty of articles from local and nation newspapers, brokers and builder’s websites etc. on the topic.

A quick google will get you the info. We’ve already established that local builders offered various incentives and recorded a different price on the LR. In effect selling for less than the recorded price.

There were issues with Apartments in Manchester where the builder was giving cash back of up to £30k to Keep the LP at say £200k so the purchasers could get a higher L to Value. I believe it was some of the big builders involved and to me this is a fraud. I think there was some sort of an investigation as it involved cooperation between the developer, the mortgage broker the purchasing Solicitor and the lender.

I don't recall anything like this in NI.

In England, even today the List Price is not what you pay. They refer to that as the Headline Price and people fully expect to negotiate down from that or get free extras included if paying that. however if they agree lower then that is the recorded price in the Land Reg'.

Again. The price recorded in Land Registry has nothing to do with the vendor. It is submitted by the purchasing Solicitor, along with the STLT return a month after purchase completes. The only time I submit anything to Land Reg is when we purchase the land in the first place.

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I have read that after a house survey it can be possible to renegotiate the sale agreed price.

To what extent is this possible?

For example, if the front window of the house is smashed, and this comes up in the survey, can this be used to renegotiate the price? Or would the seller simply say, surely you saw the front window was smashed when bidding?

Or anything else that might come up in a survey for which the seller could say that this should have been obvious.

What amounts/percentages can be negotiated off an agreed price after a survey?

Thanks.

Absolutely depends.

In one house I nearly bought - I knocked another 10(ish)% off the previous agreed price after survey showed there was a ton of extra work needing doing. But it was an inherited house, probate was taking ages and they wanted the wonga asap.

The house I actually bought - I didn't get anything off after survey (but I'd already knocked 18% off the asking price) and it was the cheapest house sold in the street for about a decade.

You should always definitely try for any difference between what you agreed, and what the surveyor says it's worth - and any repair costs - and go from there. Then if you're feeling really mean/confident - gazunder them at exchange.

The approach is to work out what the house is worth to you - and how much you are willing to pay - then negotiate accordingly. A survey may change your view on both counts. Don't try and get fixed percentages off, or split differences etc.

Edited by StainlessSteelCat

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