Building Inspections

How Building Inspections Can Make You a Better Negotiator

building inspections

 

Many real estate buyers and sellers believe that the purchase price is negotiated and finalized when the contract is signed.  If you don’t want to get the best price for your property, then you can go ahead and do that. I know I won’t. The true negotiations really begin AFTER a contract is signed.

Building inspections are a risk mitigation strategy. It allows potential buyers to understand the current condition of a property and to identify any issues or repairs that need to be addressed. No one wants unwanted expensive surprises, so a thorough inspection is a must have due diligence activity.

Other than the obvious reasons identified above that gives the buyer the peace of mind, building inspections can also be your best friend when you are trying to negotiate the selling price with the seller.  It can be the catalyst for savings and discounts.

When an offer is made on a property it’s usually based solely on the information provided by the seller. The inspection results can help you justify credits, and discounts if there are existing issues that were not previously identified.  You can ask the seller for a credit to fix these issues will help offset some closing costs.

Building inspections are an important bargaining chip for investors. Potential buyers have the option to do as detailed an inspection as they want. You would not be doing yourself any favors through if you didn’t get a thorough run through of the property.  Your checklist should include as a minimum structural (foundation, roofs) and mechanical (HVAC, electrical, plumbing etc.) inspections.

If you are provided the opportunity to speak with the inspector immediately after the inspection, do it!   The information is fresh in his/her mind and you might get some useful insight in the results. In addition you might get more information than what they will be willing to include in the formal report.

If you want to truly be able to negotiate the price, you also need to inspect more than the physical asset. Other than building inspections you also need to inspect all the leases, all the units, all the financials, all the service contracts, and utilities to name just a few.

No property is perfect so it’s expected that every report will come back with something that you can negotiate with the seller. Regardless of the results of the report, it’s good practice to go back to the seller to ask for a discount that will add value for you.

Don’t forget, successful negotiations should never be one sided.  Both parties need to “get” something out of the deal. It should never be your goal to fleece a seller. Work with them to come to a fair agreement that results in a win-win for both parties. That’s a quality of a good negotiator.

Real estate is a great way to build wealth. To find out how investing in real estate can benefit you, get in touch with us.

Remember, real estate doesn’t have to complicate. With Simple Acquisitions it’s smart, secured and simple!

Marc Dupuis

About Marc Dupuis

Marc got the real estate bug in his early twenties, and it’s never left. He has multi-faceted experience dealing with real estate investment companies. Marc’s is what you can call a real estate jack of all trades. He’s been an investor, landlord, property manager and builder in the Ottawa area since 1996 when he bought his first income property. He has since acquired a dozen income generating properties. He’s brokered property purchases for friends. He’s a partner in a commercial building and has built several new homes. His most recent build was featured in the May 2012 edition of Ottawa Magazine http://www.ottawamagazine.com/homes-gardens/2012/05/11/a-house-we-love-a-cliff-side-dwelling-in-chinatown-and-on-lebreton-flats/ Marc manages the research and acquisition activities for Simple Acquisitions, LP. He creates strategic alliances with financial institutions, property managers, brokers, attorneys, contractors, developers, and real estate investment companies on a daily basis. Marc is also the liaison between the company and its private lenders. Marc has an innate ability to see the end result when nobody else can. He’s known for bringing all the necessary resources together to achieve his goals. He loves to talk to aspiring investors and provide education and guidance where he can. He even sent a laptop to an unemployed man that he met at a gas Station in North Carolina who was down on his luck, in the hopes that it would be a tool that could help him learn about way to make a living.
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