If you've lived in your home for a long time, you might be unsure what a survey will find - particularly if it's an old building. Sometimes longstanding issues like damp, or subsidence, come up in a survey, and that can be pretty worrying if you're unsure what this will mean for your home sale - or the value of your home.
Will you have to reduce your asking price? Will you need to make sure the issue is fixed before you can move house?
In this blog post we outline what to do if a survey of your home comes back with significant problems.
A house survey is a formal investigation into the condition of a property. They are usually used by potential buyers to check if there are any large issues with the property they are looking to purchase. Potential buyers will usually get a survey on a house done after you've accepted their offer, and the conveyancing process has started. Whether a buyer chooses to get a survey done (or more than one) is up to them; they'll have to cover the cost too.
House surveys are conducted by professional surveyors, and come in a variety of forms, depending on how in depth an assessment your buyer is after.
The most basic surveys are called 'Condition Reports'. Once complete your potential buyer will get a 'home buyer report' that rates problems on a traffic light scale of severity: green for things that are in good condition and don't require action; orange for things that need attention but are not particularly serious; and red for any problems that need to be fixed urgently. The report will also offer a summary of a property's defects. When investigating for a 'Condition Report', a surveyor will only comment on things they can see just by walking around the property. They won't look under floorboards, in attics, or behind furniture, so they may not be able to see or report every problem.
On the opposite end of the scale there are more intrusive investigations: a 'Building Survey' or a 'Structural Survey'. These may take a full day to complete and are the most intrusive investigations into a property's condition. On completion of these types of surveys, your potential buyer will receive a report of the issues with your property, along with a prediction of what it would cost to rectify them. They might also be provided with a valuation of your property based on the surveyors findings.
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When a surveyor comes to a property, they are looking specifically at the condition of the building. They will focus on things like the structural integrity of the property, and any obvious risks to a homeowner. Issues like penetrating damp for example could cause damage to wooden supports within a property's structure, which could be costly and difficult to fix.
They'll also look at more superficial things, such as whether the internal features of the house are in good condition, and whether there are signs of wear and tear that could cause issues in the future.
Common issues that surveyors will be looking for include:
Most surveys, particularly of older homes, do come back with a variety of problems. These can look more severe on the survey report than they actually are. Many problems that a surveyor might find are the result of common wear and tear, and are pretty easy for a specialist to resolve - though it might cost a bit to do so.
No, it's not possible for a property to 'fail' a house survey. But, it is possible for a survey to find extensive issues that you may not have been aware of. In these cases, a buyer might decide they no longer want to go through with the sale, or request a significant discount on your asking price.
Sometimes problems brought up in a bad survey can make it very difficult for a buyer to get a mortgage. When a lender agrees to offer a mortgage, they do so on the basis that if repayments are not made, they will get ownership of the property. This means a property has be valuable enough to be worth the loan. If there are severe structural problems, or things that will require significant cost to fix, a mortgage lender will be more cautious about how much they will lend. These sort of problems can include a severe infestation of Japanese knotweed, or cladding that doesn't meet health and safety standards.
If a survey of your property comes back showing significant problems the best thing to do is to discuss openly with your potential buyer about how you will proceed. There are three common outcomes of a bad survey:
The first step to figuring out the best way forward is to get a copy of the survey. You'll then be able to see clearly the surveyors comments and what problems they recommend tackling urgently.
Using this, take the time to figure out how much repairs would cost to get done, and how long they might take. Get a one or two independent quotes from specialists to get a sense of price, or talk to your conveyancer. It's quite common for a buyer to suggest a reduction in asking price to cover the repairs. Obtaining your own quotes will give you a sense of what reduction might be reasonable, and give you a starting point for compromise.
For example if you find your property has a problem with Japanese Knotweed, the cost of getting a herbicide treatment done might cost £2,000-£5,000, and take a period of 3 years. A buyer might be keen to negotiate at least this amount off the asking price.
How much you want to negotiate with your buyer will depend upon your personal circumstances, as well as how the property market is doing in your local area. For example, if you're looking to move quickly, you might be willing to accept a larger discount on the asking price than someone with no time pressure. On the other hand, if there is a high demand for properties in your area, and not very many on the market, you will be in a stronger bargaining position, and a buyer might consider not asking for full compensation.
Another option is offering to undertake the repairs yourself before you move out. Completion of any work would then become part of your contract, and would have to be done before a set date. You'll also likely have to provide evidence that the issues have been resolved, and that you hired a specialist tradesperson. For some repairs, you may also have to obtain an indemnity insurance certificate. This means you're unlikely to save much more money undertaking the work yourself, but the offer can be used as a option for compromise. Weigh up the discount your buyer is asking for, against the amount quoted to you by independent tradespeople - and the inconvenience of having to do the work. This will help you decide if its a good option for you.
Remember many buyers often prefer the control of being able to fix issues themselves, because it means they can pick how much they spend, and the quality of the tradespeople they choose.
If you're unsure of the best route forward in your negotiations, your conveyancer will be on hand to provide guidance and support. They are experts in these sorts of situations, and will know how to approach your specific sale.
In some cases issues on a survey can cause a mortgage lender to reduce the amount they are willing to loan to your buyer. If this happens, many buyers will either have to pull out of the sale, or try and get the funds together from elsewhere - which could take time, and be unsuccessful.
If the results of the survey are bad enough to make it difficult for potential buyers to get a mortgage, you may want to consider only accepting offers from cash buyers. You could also think about selling at a significant discount, or through a non mainstream method, like auctions.
When approaching this situation it's important to think about what your personal needs are. Think about how much money you need to make from the sale. Maybe you need the funds for the purchase of your next home, or maybe it's for a retirement fund. If this is the case, it might make sense to put a plan in place to resolve the issues with your property, and delay your home sale.
But, if you're looking to move soon this might not be feasible. If you're relocating for a job, perhaps its more important to sell fast, than it is to get the full offer price. These circumstances are individual, and taking a step back to examine your priorities is a good place to start.
Remember: If a buyer has to pull out of the sale, they may be able to sell the results of their survey on to the next potential buyer. This means it is vital that you are upfront with any new buyers about the issues that arose in this original building survey before accepting an offer. Moreover, if you are looking for the full asking price, you may need to take steps to dramatically improve these problems before anymore surveys are completed.
If your property has had a bad survey and you're unsure what to do, the best place to get advice is from your conveyancer. Your conveyancer is responsible for negotiating your contract and they will have extensive experience in the best practice to deal with most of the common problems that arise in surveys. They will be aware of all the legal and financial implications of your survey, and be able to let you know what sort of compromise or changes to your contract are reasonable.
For more information on how to find the best conveyancer in your local area, check out our guide to conveyancing
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