Reasons for renegotiating the purchase price of a property
Renegotiating the purchase price of a property is an obvious thing to consider if your house survey reveals unexpected defects, particularly if they are going to be costly to repair. Most purchasers would make an offer “subject to survey”, making it clear that firstly, they plan to have a survey, and secondly, if the survey reveals defects which they were not aware of they may consider revising their offer. Visit the following: https://www.gov.uk/buy-sell-your-home/offers
Renegotiating the purchase price of a property may also be necessary if you are seeking a mortgage and the mortgage valuation is less than the previously agreed purchase price.
How to renegotiate the purchase price
Renegotiating the purchase price of a property would typically be done through the estate agent.
After receiving the survey report, the buyer should obtain cost estimates from contractors for any recommended works prior to commitment to purchase. The estimates can be used as a basis for negotiation.
It is important to remember that the seller is under no obligation to reduce the price, even if works are required. Most sellers would have a minimum price for which they are prepared to sell their property. This may be based on how much they need to repay a mortgage or how much they need to be able to buy their next home. However, some purchasers may be in a position to agree a reduced price in order to achieve a sale. The selling agent may know the vendor’s position and should be able to advise the buyer whether there is any room for negotiation.
Sometimes the selling agent or vendor will ask to see a copy of the survey report. The survey report has been prepared for the buyer, and the buyer is under no obligation to provide this to anyone. However, in some cases it may be helpful to show extracts of the report, along with quotations for the works, but this is entirely the buyer’s choice.
If the reason for renegotiating the purchase price is because the mortgage valuation is lower than the previously agreed purchase price then the purchaser may not be able to proceed with the purchase unless the price is lowered or the buyer has additional funds to put towards the purchase.
The success of negotiations will depend on a number of factors including the seller’s financial position, whether the seller needs to sell the property and whether there are any other potential purchasers on the scene who are in a position to proceed and are prepared to pay a higher price.
Remember that the seller does not have to reduce the price and may even decide to not sell the property if it does achieve a particular selling price. The success of any negotiation depends not only on the cost of any works but also on the individual circumstances of both the buyer and seller.