It may be stating the obvious, but the primary use of a Building Defect Report for a property buyer is to assist in understanding the true condition of the property, its present (possibly hidden) and future repair costs to help ensure the buyer can actually afford to become the owner of the property. However, a secondary, lesser known, function of a competent Building Defect Report is its potential to be used as an effective negotiating tool.

How do I use a defect report to negotiate a better deal on a house?

Here’s a draft of an email I often send to home buyers wanting to re-negotiate the purchase price of a property following my inspection and the discovery of costly building defects:

Subject: Building Masters – Negotiating Suggestions

Hi Home Buyer,

Following our conversation, here are some negotiating tips you can use to negotiate a better deal.

I suggest your first step could be an email saying something like:

“We wish to withdraw from the purchase of 123 Sample Street Wishtown. Please arrange the immediate refund of my deposit. If you wish to contact me, I am unable to accept a phone call due to heavy work commitments and would appreciate your communication by email only.”

The agent’s response

Despite your request, the vendor’s agent will most likely immediately try and call you. It can help to have their phone numbers entered in your contacts – I suggest you screen their calls and don’t answer.

The agent will then email saying “what’s wrong, how much are the repairs and can I see the building report?”

I suggest you then email the report to him. They will probably try and call you once more – again, I suggest you don’t answer.

He will then most likely email you saying, “Are you still interested in the property if a further reduction in the price can be negotiated”?

I suggest you then say, “If the price reduction is sufficient to cover the repair costs, I might still be interested.”

The bottom line

You can go backwards and forwards like this until you are satisfied with the deal. In my experience, they will most likely ‘meet you halfway’.

Just make sure you only do it by email, so the agent is unable to gauge your ‘emotional level of interest’ or read your ‘body language’.

Good luck and let me know if you have any questions or tips of your own.

-Mike