Curtley-Óg
Registered User
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- 38
Hello
I am a FTB, and went sale agreed on a property at the start of Jan.
It is a 2 bedroom mid terrace house in a provincial town, in need of renovation/modernisation.
The purchase price is ca. Eur150,000, ca. Eur10,000 above the guide price.
There were at least 2 under-bidders.
After deposit and transaction fees I should have min Eur30k to spend on renovations - Eur10k immediately from savings, and min Eur20k from Oct of this year (share options mature then, it is a SAYE scheme so Eur20k guaranteed + any upside which today would be ca. Eur10k after CGT).
Since going sale agreed (in date order)
1. I received the BER report from the vendor's EA and noticed the square meter floor area is significantly less than that advertised. ca. 70m2 advertised, 58m2 BER. (Note BER report currently gives a BER G, with potential to get to B2.)
2. I had an independent valuation done by a local EA (who I will call the "purchaser's EA" to avoid confusion with the vendor's EA), which raised no concerns with the sale price - note I did not share the floor area discrepancy until after this valuation was done.
3. When discussing this valuation, I shared with my (purchaser's) EA the discrepancy in floor area. This purchaser's EA took away to confirm with the vendor's EA. The vendor's EA remeasured the area, and phoned the purchaser's EA to advise 61m2.
4. I spoke again today with the purchaser's EA, and he has made no change to the original valuation - i.e., the sale-agreed purchase price remains representative of his valuation. He explained that his valuation is not particularly sensitive to a reduction of ca. 10m2 in floor area, but is based primarily on location (town centre), the fact there are two decent sized bedrooms, a relatively large bathroom, and a decent sized back garden area. That said, the purchasers EA advised it would be reasonable for me to request a renegotiation of the sale price on the basis of the change of floor area, albeit with a risk that the vendor could use this to bring underbidders back into play.
My primary focus now is to proceed with an engineering survey to assess whether there are any showstoppers regarding the structural integrity of the house and, if all-clear, to determine what renovations will be necessary along with a ballpark outlay. My solicitor is also now proceeding with the review of deeds.
My gut tells me not to worry about the discrepancy in floor area, and to maintain focus on getting the engineering survey done. Once I have the engineering report (likely in about 2 weeks), I will assess whether my minimum renovation budget of Eur30k will make the house liveable within 2 months of getting the keys, and comfortable by the end of 2022. Depending on what information surfaces through both this engineering report and my solicitor's review of deeds, I may go back to the vendor's EA to renegotiate price. I will be properly appraised at that point of essential information about the house - my hope (obviously) is that there are no "big ticket" concerns at that point and if so it is unlikely I'll look to renegotiate the price. If there are showstoppers which would genuinely cause me to consider walking away from the purchase unless paid for or otherwise addressed by the vendor, I would then open a discussion about the purchase price.
Just to clarify, my current (probably "glass half-full") base-scenario for renovations over three phases from 2022 - 2024 is:
- Phase 1 Apr - Jun 2022: Eur10k to get essentials done before moving in, asap. Likely this will include minor roof fixes (assuming timbers OK), roof insulation, new doors, double-glazed windows, draught-fixing, ventilation work to address or at least begin seriously addressing any damp issues.
- Phase 2 Oct - Dec 2022: up to Eur30k to progress larger scopes - incl wall insulation, heating system, ensure electrics/plumbing up to spec. Potentially incl major roof fixes (assuming timbers not OK).
- Phase 3 2023 - 2024: up to Eur10k to modernise - new kitchen, decorating
This base-scenario is obviously highly dependent on what comes back from the upcoming engineering survey, but is my best (albeit probably optimistic!) high level guesstimate of work and cost as of today.
I would be grateful for feedback on my strategy above. Obviously I am relying primarily on solicitor and engineering professionals which I have engaged, however I'd be interested to know if anyone on here has lessons/perspectives they can share based on their own experience.
In terms of specific questions:
1. Given I really want / need this purchase to go through, is my focus on engineering survey the right one? (ie, understand/quantify the totality of risks and issues with the property, and then assess whether or not to engage any further with the vendors EA regarding purchase price).
2. Has anyone had experience of successfully renegotiating price based on a discrepancy between advertised and actual floor area?
3. Has anyone had experience of successfully renegotiating price based on significant renovation work being indicated by the engineering survey? This assumes the property is already clearly in need of renovation from the ad and viewing, but that the survey identifies a "major" structural issue.
4. Generally speaking, is it prudent to only consider opening a renegotiation of purchase price if and only if one is ultimately willing to walk away?
5. Is my 3-phase approach to renovations above a good one in principle?
6. How are my ballpark cost estimates - wildly optimistic, or OK? (obviously these are guesstimates needing a lot of refinement once more information is available from the engineering survey, but any feedback on rules of thumb for renovation costs would be welcome).
7. Is it best to engage a quantity surveyor to work up a bill of quantities as a next step to the engineering survey for me to sharpen my estimates? Or is that overkill at this prepurchase stage, and is there an equally reliable or better way for me to determine the outlay for renovations before I commit to the purchase? Are there up to date online resources for estimating materials and labour which a layperson like myself access?
Thanks in advance.
I am a FTB, and went sale agreed on a property at the start of Jan.
It is a 2 bedroom mid terrace house in a provincial town, in need of renovation/modernisation.
The purchase price is ca. Eur150,000, ca. Eur10,000 above the guide price.
There were at least 2 under-bidders.
After deposit and transaction fees I should have min Eur30k to spend on renovations - Eur10k immediately from savings, and min Eur20k from Oct of this year (share options mature then, it is a SAYE scheme so Eur20k guaranteed + any upside which today would be ca. Eur10k after CGT).
Since going sale agreed (in date order)
1. I received the BER report from the vendor's EA and noticed the square meter floor area is significantly less than that advertised. ca. 70m2 advertised, 58m2 BER. (Note BER report currently gives a BER G, with potential to get to B2.)
2. I had an independent valuation done by a local EA (who I will call the "purchaser's EA" to avoid confusion with the vendor's EA), which raised no concerns with the sale price - note I did not share the floor area discrepancy until after this valuation was done.
3. When discussing this valuation, I shared with my (purchaser's) EA the discrepancy in floor area. This purchaser's EA took away to confirm with the vendor's EA. The vendor's EA remeasured the area, and phoned the purchaser's EA to advise 61m2.
4. I spoke again today with the purchaser's EA, and he has made no change to the original valuation - i.e., the sale-agreed purchase price remains representative of his valuation. He explained that his valuation is not particularly sensitive to a reduction of ca. 10m2 in floor area, but is based primarily on location (town centre), the fact there are two decent sized bedrooms, a relatively large bathroom, and a decent sized back garden area. That said, the purchasers EA advised it would be reasonable for me to request a renegotiation of the sale price on the basis of the change of floor area, albeit with a risk that the vendor could use this to bring underbidders back into play.
My primary focus now is to proceed with an engineering survey to assess whether there are any showstoppers regarding the structural integrity of the house and, if all-clear, to determine what renovations will be necessary along with a ballpark outlay. My solicitor is also now proceeding with the review of deeds.
My gut tells me not to worry about the discrepancy in floor area, and to maintain focus on getting the engineering survey done. Once I have the engineering report (likely in about 2 weeks), I will assess whether my minimum renovation budget of Eur30k will make the house liveable within 2 months of getting the keys, and comfortable by the end of 2022. Depending on what information surfaces through both this engineering report and my solicitor's review of deeds, I may go back to the vendor's EA to renegotiate price. I will be properly appraised at that point of essential information about the house - my hope (obviously) is that there are no "big ticket" concerns at that point and if so it is unlikely I'll look to renegotiate the price. If there are showstoppers which would genuinely cause me to consider walking away from the purchase unless paid for or otherwise addressed by the vendor, I would then open a discussion about the purchase price.
Just to clarify, my current (probably "glass half-full") base-scenario for renovations over three phases from 2022 - 2024 is:
- Phase 1 Apr - Jun 2022: Eur10k to get essentials done before moving in, asap. Likely this will include minor roof fixes (assuming timbers OK), roof insulation, new doors, double-glazed windows, draught-fixing, ventilation work to address or at least begin seriously addressing any damp issues.
- Phase 2 Oct - Dec 2022: up to Eur30k to progress larger scopes - incl wall insulation, heating system, ensure electrics/plumbing up to spec. Potentially incl major roof fixes (assuming timbers not OK).
- Phase 3 2023 - 2024: up to Eur10k to modernise - new kitchen, decorating
This base-scenario is obviously highly dependent on what comes back from the upcoming engineering survey, but is my best (albeit probably optimistic!) high level guesstimate of work and cost as of today.
I would be grateful for feedback on my strategy above. Obviously I am relying primarily on solicitor and engineering professionals which I have engaged, however I'd be interested to know if anyone on here has lessons/perspectives they can share based on their own experience.
In terms of specific questions:
1. Given I really want / need this purchase to go through, is my focus on engineering survey the right one? (ie, understand/quantify the totality of risks and issues with the property, and then assess whether or not to engage any further with the vendors EA regarding purchase price).
2. Has anyone had experience of successfully renegotiating price based on a discrepancy between advertised and actual floor area?
3. Has anyone had experience of successfully renegotiating price based on significant renovation work being indicated by the engineering survey? This assumes the property is already clearly in need of renovation from the ad and viewing, but that the survey identifies a "major" structural issue.
4. Generally speaking, is it prudent to only consider opening a renegotiation of purchase price if and only if one is ultimately willing to walk away?
5. Is my 3-phase approach to renovations above a good one in principle?
6. How are my ballpark cost estimates - wildly optimistic, or OK? (obviously these are guesstimates needing a lot of refinement once more information is available from the engineering survey, but any feedback on rules of thumb for renovation costs would be welcome).
7. Is it best to engage a quantity surveyor to work up a bill of quantities as a next step to the engineering survey for me to sharpen my estimates? Or is that overkill at this prepurchase stage, and is there an equally reliable or better way for me to determine the outlay for renovations before I commit to the purchase? Are there up to date online resources for estimating materials and labour which a layperson like myself access?
Thanks in advance.
