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Thread: Buyer beware!

  1. #1
    MotherBear's Avatar
    MotherBear is offline The missing link
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    Default Buyer beware!

    Prompted by Lou and Jon's recent house purchase, I thought I'd better post this to alert potential buyers who may be about to put in an offer for a property downunder. We recently got caught out after we thought we had done the right thing to protect ourselves.

    We put in an offer on a house, the vendor came back with another figure and we accepted that. The offer went in subject to the LIM report and a building inspector's report. In the photos, the property looked immaculate, had everything we wanted and it had recently been repainted which, I must add, did ring a little alarm bell with me. Whereas it's always great to find a property that has been freshly painted, I can't get away from the niggling feeling of 'Are they trying to cover something up?' Unfortunately, this time I was right. The building inspector's report was very damning as the house was a classic NZ leaky home with major problems inside and out. The report was somewhat overwhelming so we decided to back out. That was when we found we couldn't just walk away from the deal. Because we had made a formal offer we had, at least, to allow the vendor to put right all the problems. If he couldn't or refused, then we could get out.

    The vendor came back saying he would carry out the repairs, no matter what the cost. We estimated the work would take several months yet, after only a couple of weeks, we were amazed to hear that the work had been completed. As we suspected, it was too good to be true and only part of the work had been done properly and the rest just covered over. After stating that the work hadn't been carried out to our satisfaction, the vendor finally came back and offered us a $5,000 reduction on the price if we would finish the work ourselves. This wasn't acceptable because the cost of the work would amount to a lot more than that. It was only then that we could get out of the deal. I believe, even if all the work had been done satisfactorily, we would still have been nervous of future problems because of the very nature of leaky houses.

    I was so shocked that we hadn't been able to just drop the house when we found that the building inspector's report was bad, that I got on the Net and researched this. I only found one site (near the bottom of the page) that warns that this clause is not a get-out one.

    Offer subject to a satisfactory building inspection. Note that "Offer subject to a satisfactory building inspection " is not necessarily a clause that the buyer can use to break the contract because the vendor may insist on fixing the problems identified in a building inspection report.

    If you want to protect yourself go for the Due Diligence clause, which a solicitor will help you with.
    Mother Bear

    Try to bloom wherever you are planted.

  2. #2
    ebianca's Avatar
    ebianca is offline Gingery, Peppery & Spicy
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    Thanks for that MB.
    Although we won't be in a postition to buy for probabaly another couple of years i'm sure others will value the imformation.
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