“Know for sure...”

Using your building inspection report to instantly beef up your negotiation power

May 26, 2016

negotiation.jpgDepending on the timing of your building inspection, you are likely to be using it as a tool in your arsenal come negotiation time. 

Like any tool, there is a spectrum of how useful it can be; all dependant on how you use it.

Obviously if the report has come back and essentially said that the next gentle wind may bring the whole place down, you won't be using it so much for negotiation. 

Now, if the report has come back and highlighted that there are a few areas that may be in need of some TLC, this is a different story all together!

We have put together this list of scenarios, for how you can best use your inspection report to help you negotiate your way to victory!

 

The Most Basic Option, Use it to Back Out of an Offer

This may not necessarily be the negotiation that you were expecting, but it could be a very important option.

Your building inspection report will outline any major as well as minor structural problems that the building is facing.

The real question becomes, which problems are cause for enacting the 'subject to building inspection' clause within your offer. 

The main problem you may find, will be how you worded this specific clause when you made your offer.

Simply using "subject to building inspection" may not actually be enough.

If the building inspection comes back indicating that there are some maintenance costs on the horizon, but no specific large structural problems that require urgent attention, it could be argued that the clause "subject to building inspection" has actually been met.

If you used wording more along the lines of "subject to building and pest inspections deemed satisfactory by the buyer" then your lines of negotiation for terminating the offer are much stronger. 

You will still need to ensure that the report includes reasonable cause for concern and termination, but you have made it very clear that it is YOUR terms on which this is assessed.

 

When Your Inspection Report Comes Back With Some Smaller Problems

Up to this point, the conversation about you and this property has probably been more about lifestyle, livability and location. 

The real estate agent has been highlighting every benefit of the property and location that they can, gradually doing their job and making you fall in love with the idea of the house.

Your main ability to push back on price up to this point has been 'market factors' or simply assertion.

Now that the report is back however, you will have some better arguments for price reduction than you were previously armed with. 

The real question becomes, how much negotiation power can the report bring you.

If it is after an offer, the power will be somewhat capped, as you have already made a commitment in good faith, and the report will need to essentially contain some major structural issues to be able to give you any power.

If it is prior to an offer however, you can really start to negotiate!

Looking to get a leg up in the negotiation phase? We have put together a fantastic guide for using your pest and building inspection report to really add fire to your negotiation process!

Get Our Free Guide To Negotiating On Price!

 

 

Categories: building inspections, pest inspections, negotiations

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