You’ve found the home of your dreams but it needs a bit of work. How do you ensure your dream home doesn’t become a money pit?
How bad is it really?
Is it just the colour of the walls, or the state of the carpet? Is the kitchen a 1970s original? Or is there a serious mould problem connecting the ceilings to the floors and a collapsed ceiling? Understand if your issues are just surface problems that can be easily rectified with some elbow grease or a call to a handyman, if they require major building work to repair, or if they’re somewhere in between. Get an expert to help with the assessment.
What do you need to spend?
To understand just how much the value of the home is affected, find out what the cost of repairs are likely to be. Gain access to the property with a builder or relevant tradesperson who can provide you with a detailed quote for the work. This will help guide your offer, provide an important proof point as part of your negotiations, and get you up and running quickly should you win the property.
Consider the market
Your first instinct will probably be to just make an offer that’s way lower than the asking price. But in a strongly performing market, this may not be successful in ensuring you secure the property as it’s likely the issues have already been factored into the expected price range. If the market is quieter, you’re in a stronger position. Make sure you’re well-armed with the information that will help rationalise your offer.
How long are you going to live there?
If the property is perfectly positioned close to the schools and neighbourhood that you’ve always wanted to raise your kids, consider the money you are going to save by not moving again for the next 20 or so years. Factor this into your budgeting for repair work.
Let the agent know you’re serious
If you really love the property, let the agent know you are serious but that you have reservations. Outline what they are, why you have made the offer you have and let them know you expect a call back, even if the vendor rejects the offer. Sometimes, simply dropping the price may not be the best solution for both parties. The vendor may decide to complete the repairs, or you may be able to negotiate other concessions like settlement times.