Survey reveals defects: what are my options?

Survey reveals defects

I’ve just received my survey report and the survey reveals defects. What are my options?

1. If your survey reveals defects, the first thing to do is get quotations from contractors for the works.  Survey reports don’t generally include cost estimates because the actual costs can vary depending on whether any work is carried out in isolation or as part of a larger scheme.  Make sure that you are fully aware of the cost of all works before exchange of contracts.

2. For most works it is better to choose your own contractor rather than letting the vendor arrange to have the work done.  Most works can wait until after the purchase is complete.  If you appoint a contractor yourself then you can make sure the works are completed to your satisfaction.

3. If the survey reveals defects which are significant and not reflected in the asking price, you may wish to renegotiate the purchase price.  Renegotiation is usually done through the estate agent rather than directly with the vendor.  Remember that the vendor is under no obligation to reduce the price.  Any renegotiation will depend on how much the vendor can afford to reduce the price by.  In some cases the asking price may take into account the condition of the property and there may not be any scope for renegotiation.  Negotiation of the purchase price is a delicate balancing act and may not always go to plan.  If there are other buyers on the scene then the vendor may choose to sell to another buyer.  Similarly, a vendor may decide to take the property off the market if the likely selling price is less than anticipated.

4. You are not under any obligation to give a copy of the survey report to the vendor or even the estate agent.  They may ask for a copy but the decision is yours.  However, in some cases it may be helpful to give an extract to the estate agent to help negotiations.

5. If you find that the cost of the works is higher than your budget you may choose to withdraw and look for another property.  This is only usually an option before exchange of contracts and this is a good reason to instruct a surveyor early in the house buying process.

In the event that you withdraw from the sale then the cost of the survey is a small price to pay when compared to any unexpected expenditure you would have had if you hadn’t commissioned a survey.

 

buying and selling a house

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What should I do after having a survey?

What should I do after having a survey?

There is plenty of information and advice about having a survey before buying a property, but not so much advice about what to do after having a survey.  Remember that the purpose of a house survey is to identify any defects.  Even if a property is in a good order it would be unusual for no defects to be noted.  Any minor items can be dealt with once you have purchased the property.  However, if a survey report reveals that extensive works and/or investigations are needed then some purchasers may be unclear about the best way forward.

Firstly, you should forward a copy of the report to your solicitor as there may be items which your solicitor may need to check such as:

  • Ownership and responsibility of boundaries.
  • Ownership and responsibility of drains.
  • Ownership and responsibility of any shared drives/access ways.

Typically, a purchaser should obtain quotes from builders before commitment to purchase (normally exchange of contracts).  By doing this, the purchaser will be able to decide whether or not to proceed with the purchase in full knowledge of the level of expenditure required.

In some cases, a vendor might offer to arrange for minor repairs to be carried out before the sale of the property.  However, for most works, if you plan to proceed with the purchase it is better to wait and have the work carried out after completion of the sale.  By choosing your own contractor you will be in control of the quality of work carried out.  However, you should still obtain quotation/s before exchange of contracts.

Sometimes further investigations will be required, eg, if a defect is suspected but cannot be confirmed within the scope of the survey.  Opening up may  be required (with the vendor’s consent) or a specialist (such as a drainage contractor, wall tie contractor, etc,) may need to attend.

If the survey report recommends further investigations which are disruptive the vendor might not be willing to have these undertaken.  For example, if ground floors need to be taken up to inspect floor timbers to check for dampness and/or rot then this may involve moving large amounts of furniture and may damage carpets.  If this is the case, it is better for a buyer to budget for the worst case scenario, such as removal of ground floors, replacement with a solid concrete floor, etc.  The investigations can then be carried out after the sale has completed.  If the works required are found to be less extensive then a saving will be made.

If the cost of repairs is found to be significant, you may choose to speak to the selling agent to check whether the vendor may renegotiate the sale price.  If the vendor is keen to sell the property and if their financial position allows them to reduce the price, either in part or in whole, then the estate agent will negotiate to agree on a selling price.  However, the vendor is under no obligation to reduce the price.  In some situations a vendor may not be in a position to reduce the price, particularly if the vendor has a high mortgage or needs to sell at or close to the asking price to be able to buy their next house.

Above all, after having a survey, read the report carefully and read it more than once.  Highlight any important parts, obtain prices for any works and carry out any further investigations (if possible) before exchange of contracts.

 

buying and selling a house

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