Dilemma of paying for an engineer before having an offer accepted

messinkiapina

I'm interested in putting an offer in on a house but the estate agent has told me that he won't accept an offer subject to an engineer's report. He claims that because it needs a few minor bits and pieces done, he can't sell it subject to a glowing report from an engineer. He did say that I can arrange for an engineer to survey the house for me before bidding, but there is obviously the risk that even if the engineer okays the house I'll still be outbid.

There is a bid in on the house already, and that party has already had an engineer visit the property which may be some indication that it's in sound condition? Though I only have the estate agents word to go on there.

I don't mind spending the money and having an engineer telling me it's not worth buying...What would really bother me is getting a positive report and still getting outbid.

Is there any other angle I could come at to convince the estate agent to allow me to make a bid subject to a survey?

mari2222

messinkiapina wrote: »

I'm interested in putting an offer in on a house but the estate agent has told me that he won't accept an offer subject to an engineer's report. He claims that because it needs a few minor bits and pieces done, he can't sell it subject to a glowing report from an engineer. He did say that I can arrange for an engineer to survey the house for me before bidding, but there is obviously the risk that even if the engineer okays the house I'll still be outbid.

There is a bid in on the house already, and that party has already had an engineer visit the property which may be some indication that it's in sound condition? Though I only have the estate agents word to go on there.

I don't mind spending the money and having an engineer telling me it's not worth buying...What would really bother me is getting a positive report and still getting outbid.

Is there any other angle I could come at to convince the estate agent to allow me to make a bid subject to a survey?

You ring the estate agent and say I'm offering X for "house address" subject to survey (and mortgage approval if needed). That's all. No point debating anything with the agent, his role is to communicate your offer to the seller and the seller's response to you.

Diddler1977

mari2222 wrote: »

You ring the estate agent and say I'm offering X for "house address" subject to survey (and mortgage approval if needed). That's all. No point debating anything with the agent, his role is to communicate your offer to the seller and the seller's response to you.

And if they come back and say your offer wasn't accepted because you hadn't got a survey before you bid - you could suggest that they pay for an engineers report that would be included with the selling pack.

robd

messinkiapina wrote: »

I don't mind spending the money and having an engineer telling me it's not worth buying...What would really bother me is getting a positive report and still getting outbid.

Is there any other angle I could come at to convince the estate agent to allow me to make a bid subject to a survey?

A survey costs about €300.

Was involved in a house recently where we got a survey done before putting bid in (of our own accord). Given house needed so much work and was in such a dilapidated condition it made sense to do that. We haven't bought in the end due to vendor not being reasonable on price.

I can see where EA is coming from. There is absolutely no point putting a bid in on a property in need of a huge amount of work if you haven't got a survey done and you don't have a reasonable estimate of what it will cost to get work done. Also in general you need the cash to get said work done as banks aren't lending for renovations in current environment.

So if you're not in that position it's hardly a bid and you're just bidding against real buyers who are ready to go and will complete, where as the risk is you will pull out upon survey or mortgage valuation.

Also, I would refuse to entertain counter bids from people without surveys if I was a buyer who had had a survey done.

killers1

Do not waste your money on a survey when you haven't even had an accepted offer. The EA's job is to refer all offers to the seller & let them decide. If an interested party has already paid for a survey prior to having an offer accepted they have sent out a signal that they are very interested in the property and it's possible they'll enter a bidding war with you which will increase the price and you may be outbid. Ask the EA has he ever sold a property before? (well, maybe don't) An offer is accepted subject to survey (that is the norm in every case without exception and it is unreasonable for a seller or EA to assume differently) in the same way it's subject to contracts being in order. Just explain that you are reluctant to pay for a survey when a deal hasn't even been agreed in principle. Tell him you like the property and are fully aware that's there is no such thing as a blank survey report... If you have any friends in the building game or engineers/architects etc bring them along to a viewing to see if anything obvious jumps out. I have a feeling there may be more to the condition of the property than meets the eye...

riclad

if its an old victorian house eg at least 70 years old ,it may be wise to get a survey done ,before you put in an offer .IF the owner has a survey done, surely he can give you a copy.ARE you talking about a full structural survey.IF your bid is not accepted ,you ,ve lost a few hundred euro. various problems,
HOW much is the house going for ,is it a standard semi d.
i would nt get a survey on a semid 20 years old, unless i thought it might have a pyrite problem.
if you are buying an older house for 250k ,its worth getting a survey.
OLDER houses may have dry rot, mould or various flaws which a non expert may not notice.
MAYBE the estate agent knows theres various problems, he might
be doing you a favor,by telling you to get a survey.
ITS up to your own judgement ,whether its worth getting one.
i,d need to know what area its in before giving more advice.

You could offer say 100k, subject to a survey, ie if theres any major problems, found
eg dry rot ,mould , the offer is null and void, and you get your deposit returned in full.
IN an old house ,carpets ,lino, wallpaper can cover up ,problem areas .

many old houses will need a total rewiring ,electrical at some point.

robd

killers1 wrote: »

An offer is accepted subject to survey (that is the norm in every case without exception and it is unreasonable for a seller or EA to assume differently).

Not necessarily.

Why would a seller (or his appointed agent) accept an offer for 1 or 2k more when they know they have a more guaranteed offer with a survey from someone who knows what they're getting themselves into.

A bird in the hand so to speak.

There are no rules to say they have to accept your offer or deal with you. It's up to the seller and/or EA.

killers1

robd wrote: »

killers1 wrote: »

An offer is accepted subject to survey (that is the norm in every case without exception and it is unreasonable for a seller or EA to assume differently).

Not necessarily.

Why would a seller (or his appointed agent) accept an offer for 1 or 2k more when they know they have a more guaranteed offer with a survey from someone who knows what they're getting themselves into.

A bird in the hand so to speak.

There are no rules to say they have to accept your offer or deal with you. It's up to the seller and/or EA.

I agree completely but it would be highly unusual for a seller to turn down the highest bid on the basis that a survey hasn't been carried out yet.. A reasonable seller wouldn't expect a potential buyer to have a survey carried out first. It's a bit like a potential purchaser insisting on seeing the contracts before they put an offer in and there's an element of 'cart before the horse' here. In some circumstances the seller may try to insist bidders have a survey carried out before offer but if it was me I wouldn't entertain that.

messinkiapina

It's a roughly 90 Sq. Meters bungalow, built about 70 years ago. The asking price is 80k and the current bidder has put in an offer of 60k. It looks to be in decent enough shape to me, but of course I am not an engineer. I would be willing to pay the asking price of 80k as long as any repairs needed would come to less than 30k.

riclad

If its an old large house,it would make sense for the EA to advise a bidder to have a survey done.IT its a standard semi d, 12 years old, its unusual ,i would presume there must be problem.
You,d need to post age,size of house, area, eg rathmines.
YOU could make a bid, subject to survey, if bid is accepted ,ill pay for a survey.
if survey is negative,eg 10k,repairs,dry rot etc my bid will be withdrawn,
and i will get my deposit refunded.
AT somepoint ,you may be outbid, your bid refused,so you wont have to pay for survey.
eg if survey shows significant defect or repairs needed my offer is considered withdrawn.maybe offer 70k,subject to survey.Rewiring on that would cost 4 to 5k approx.

Duckjob

I think I'd be inclined to tell the EA to hop in his time machine and f**k off back to 2007.

Markcheese

If u were looking to buy a 10grand car, you'd spend a couple of hundred on a survey....
Was looking to buy a house in cork city about 10years ago and estate agent said same thing no bid accepted without a report (sale had fallen through once) before any body had chance to get a report it had gone up 25 grand in "provisional bids)... Anyway house was rotten under surface,I pulled out, but it kept coming up for resale without any work done. I'd say there must have been dozens of engineers reports done on it... All saying same thing...

Milk & Honey

Why not just make an offer subject to contract?

riclad

yeah, but no point paying for survey ,if your bid is refused.ITS a buyers market,the boom is gone.
I,ve never heard of an ea asking for a survey before a bid is accepted,its a waste loads of people having surveys on houses ,the ,ll never buy.

messinkiapina

riclad wrote: »

eg if survey shows significant defect or repairs needed my offer is considered withdrawn.maybe offer 70k,subject to survey.

I might try asking for something like that. I'm not expecting a perfect report, just some assurance that there are no major structural problems for example.

Milk & Honey wrote:

Why not just make an offer subject to contract?

I'm not sure if I fully understand what 'subject to contract' means, I think it means that nothing is binding until the contract is signed? I doubt he'd agree to that if he isn't agreeing to 'subject to engineers report'.

Milk & Honey

messinkiapina wrote: »

I might try asking for something like that. I'm not expecting a perfect report, just some assurance that there are no major structural problems for example.




I'm not sure if I fully understand what 'subject to contract' means, I think it means that nothing is binding until the contract is signed? I doubt he'd agree to that if he isn't agreeing to 'subject to engineers report'.

That is the way all sales are. You need to have a discussion with your solicitor about the phrase "subject to contract" before you pay any booking deposit or get any survey done.

riclad

You could bid say 72k,if bid is accepted then pay for a survey,the chances are the likely repairs rewiring ,would not be above ten k.
You need a full structural survey.
IF bid is refused ,no need to pay for the survey.its reasonable to spend 300
after bid is accepted, it tells you how much it,ll cost to carry out necessary repairs.

Kosseegan

messinkiapina wrote: »

I'm interested in putting an offer in on a house but the estate agent has told me that he won't accept an offer subject to an engineer's report. He claims that because it needs a few minor bits and pieces done, he can't sell it subject to a glowing report from an engineer. He did say that I can arrange for an engineer to survey the house for me before bidding, but there is obviously the risk that even if the engineer okays the house I'll still be outbid.

There is a bid in on the house already, and that party has already had an engineer visit the property which may be some indication that it's in sound condition? Though I only have the estate agents word to go on there.

I don't mind spending the money and having an engineer telling me it's not worth buying...What would really bother me is getting a positive report and still getting outbid.

Is there any other angle I could come at to convince the estate agent to allow me to make a bid subject to a survey?

The agents attitude is quite understandable. If you make an offer and then get a report which calls for repairs then you might well seek to drop the bid. The problem for the agent is that the owner is now convinced the house is worth more than it really is and trying to get a realsitic bid accepted becomes more difficult. There may also be a history of broken sales on the property. Deals may have been done and broken down at the mortgage stage. He may want to tell the owner "here is the figure, bidder knows exactly what he is getting into has bank approval etc".

Dymo

messinkiapina wrote: »

I'm not sure if I fully understand what 'subject to contract' means, I think it means that nothing is binding until the contract is signed? I doubt he'd agree to that if he isn't agreeing to 'subject to engineers report'.

The reason why subject to contract is on all the paperwork you see from a estate agent or solicitor is because the estate agent acting as an agent for the seller has the power to bind his client to the sale of the house even without there knowledge just by acting as agent. Subject to contract means he can't bind anything without a contract being approved.

There was a courtcase where this "Subject to contract" wasn't put on paperwork (secretary too fond of cut and paste) and ended up very messy with purchasing the claiming the house and seller suing the estate agent.

Hope that clears it up for you

I wish it was compulsory for every seller to have one before house's even went up for sale.

messinkiapina

Kosseegan wrote: »

Deals may have been done and broken down at the mortgage stage. He may want to tell the owner "here is the figure, bidder knows exactly what he is getting into has bank approval etc".

That makes sense regarding the mortgage. I'll be making a cash offer, I neglected to mention that to the agent. I wonder if that will make any difference.

jdivision

So you're willing to bid 20k over the current bid but not willing to pay 200 for a survey? Am I missing something here?

messinkiapina

jdivision wrote: »

So you're willing to bid 20k over the current bid but not willing to pay 200 for a survey? Am I missing something here?

The figure of 80k is for as far as I plan to go in the bidding (not a massive overbid on the current offer), with 30k set aside for any repairs that may be needed. I'm very willing to pay €300-€400 for a survey if I have a bid accepted, not willing to hand that money over while there's a chance I'll be outbid anyway.

robd

messinkiapina wrote: »

The figure of 80k is for as far as I plan to go in the bidding (not a massive overbid on the current offer), with 30k set aside for any repairs that may be needed. I'm very willing to pay €300-€400 for a survey if I have a bid accepted, not willing to hand that money over while there's a chance I'll be outbid anyway.

You can still be gazumped regardless. The vendor can still pull out regardless. Until contracts are signed and exchanged there is no contract or obligation. It really makes no difference.

I don't think you're going into this one with your eyes open at all. I pulled out of a few properties in the distant pass due to surveys. 30k of work isn't that much if indeed it is that much. I'd be inclined to think, based on what I read, you're totally guessing on this 30k figure. It could be 20k it could be 100k. Hence your offer is useless to EA without a survey.

I recently pulled out of a house requiring 150-200k of work as I couldn't get it at a price that worked. EA insisting people bidding after us get surveys as he knows the story. Houses requiring work aren't always the bargains they seem. Sellers seem to ignore the cost of renovations in their deluded values of worth.

Oh but you can make it your own. ;-) Just thought I'd throw in that EA chestnut.

messinkiapina

robd wrote: »

I don't think you're going into this one with your eyes open at all. I pulled out of a few properties in the distant pass due to surveys. 30k of work isn't that much if indeed it is that much. I'd be inclined to think, based on what I read, you're totally guessing on this 30k figure. It could be 20k it could be 100k. Hence your offer is useless to EA without a survey.

You're right, 30k is a complete guess. The agent did mention it needs 20-30k put into it, but that doesn't mean much I suppose. On the surface everything LOOKS ok with the house, it doesn't need much of anything done cosmetically. If the survey threw up nothing major apart from things like rewiring, new windows, re-insulating etc I'm guessing that 30k would be enough. However I'm aware that there might be more serious problems lurking beneath. So I do realise that an Engineers survey is a must, but as I say I'm unwilling to pay for one before having an offer accepted. I am just going to have to call the EA's bluff on that and see what happens.

Kosseegan

messinkiapina wrote: »

You're right, 30k is a complete guess. The agent did mention it needs 20-30k put into it, but that doesn't mean much I suppose. On the surface everything LOOKS ok with the house, it doesn't need much of anything done cosmetically. If the survey threw up nothing major apart from things like rewiring, new windows, re-insulating etc I'm guessing that 30k would be enough. However I'm aware that there might be more serious problems lurking beneath. So I do realise that an Engineers survey is a must, but as I say I'm unwilling to pay for one before having an offer accepted. I am just going to have to call the EA's bluff on that and see what happens.

Rewiring is disruptive and if it needs to be done you would be looking at re-plumbing and redoing the heating system as well. Floorboards have to come up all over the place and walls have to be hacked into. Re-skimming and redecorating are required after that. Having done that it is likely that the bathroom appliances will have to be replaced as well as the kitchen units and fittings. Add in some new windows and insulation. that is just the basics. If there is a fault such as damp or subsidence the cost goes up.
£30k will not go far enough to do all of it.

engineermike

messinkiapina wrote: »

It's a roughly 90 Sq. Meters bungalow, built about 70 years ago. The asking price is 80k and the current bidder has put in an offer of 60k. It looks to be in decent enough shape to me, but of course I am not an engineer. I would be willing to pay the asking price of 80k as long as any repairs needed would come to less than 30k.

The property mentioned is a pre - 63 home. Issues on a property of this type can be far reaching and costly to rectify. I've yet to survey one in Ireland that didn't need 10K + in modifications and upgrades.
Points of note in a property of this age:
Energy loss in a home circa. this period will be huge.
(your BER cert will provide an insight to the energy rating of the property)

maintenance would be a key factor during the lifetime of the structure - if not properly maintained and upgraded by past owners, a high cost is usually associated with issues such as roof renewal, dry rot and damp, clay drainage pipes to name a few.

Many of the best practice ( employed in construction) & current statutory building regulations were not employed during this period (or were to a lesser extent) - so damp proof course would likely be absent, adequate ventilation for moisture in bathrooms and kitchens, electrical termination ( or 'fuse board') to cope with the electrical loads from modern appliances could be required.

It can be the case that all of the above were taken care of and constant upgrades were made to the structure during its lifetime, i.e. you have a home 'fit for purpose' - However even in the implementation of upgrades - has a likely hood of poor modification to the home - effecting the structural elements of the existing building.
If an 'aftermarket modification' such as an attic conversion or extension has been built on, this is another detail that would indicate possibility of issues.

I'm not putting you off the idea of buying a home of that age, I bought one myself - similar period, however I went in with eyes open knowing full well I would spending a substantial amount of money to bring it up to date.

I'd also say in and around €300 is approx. correct for structural survey -location dependent (!)
Hope this was helpful,
mike f;)

riclad

most buyers a cash offer makes a big difference ,it means the deal will likely go forward, theres no bank to slow things down.And they know you have the money ,no loans needed.IF the windows are double glazed, its unlikely they,ll need replacing.
People have been known to stop the deal at the last minute, ie they might see a cheaper house, or for various reasons.