How to stop your sale from falling through by being able to read a survey report properly
The survey is a major milestone in the sale of your property, but it can also be the cause of considerable stress if the report doesn't come back clean. At first glance, many surveys can seem catastrophic, but, in fact, if you have the right information, most issues can be overcome without too much drama.
So, you've viewed many properties and finally found 'the one'. You've negotiated an offer, and it has been accepted. Now, the legal process starts, but you can stop the search; you've secured your dream home and are counting down the days until you can complete the purchase and finally get the keys.
The survey is an essential milestone in the purchase of a property. It is the point when you know that the property is in good condition and that your financing will be in place. That is, of course, if the survey goes to plan. But what should you do if the report comes back saying something unexpected?
Firstly, you need to understand the survey level for which you have paid. Suppose you have only had the valuation report from the lender. In that case, the structure and condition element of the report will be very minimal. It may point out some potential areas that might need looking into, but it will not go into any detail. This is because the purpose of the survey is to establish, for the lender, the actual value. The lender needs to know that the amount of money they are loaning to you is retrievable by a sale of the property should they need to recover their costs. The purpose of this report is not to look into the condition of the building itself in any great detail.
If, however, you opted for a Homebuyers' report or, indeed, a full structural report, then the condition of the building and any potential maintenance issues will be highlighted.
So, if the reports reveal unexpected structural issues or a lower valuation figure than the purchase price you've agreed to pay, what should you do?
- Your first task is to establish precisely what the report says. Is it highlighting major issues or simply informing you that some work will be needed at some point in the future? This is to be expected as properties have ongoing maintenance needs. These points can be similar to advisories on your car's MOT—not essential to deal with, but it gives you a heads-up that the work may be needed in the next few years.
- Decide what issues, if any, you are happy to take on as the property's new owner. Suppose there is a significant task that you simply couldn't comprehend handling yourself. Consider how this could be dealt with or whether you would rather move on to buy a different property.
- Come up with a solution—whatever the report says, whether more work is needed than you were expecting or the valuation is lower than the price agreed, there is a solution, and this opens up the conversation for what could end up being a second round of negotiations with the seller.
Fundamentally, you and the seller are both still looking for the same outcome, so either you are happy with the condition of the property and the valuation, and you continue to completion without any problems, or there are points that you are concerned about and need to come up with a solution before you complete the sale.
If, for example, something significant needs to be done immediately, such as an electrical rewire, this is not the end of the world. As the buyer, you must decide if you are happy to have the property rewired. If you are, then a simple quote from an electrician and renegotiating the price to account for the cost of the work should resolve the issue. It doesn't have to be complicated, and there is bound to be something that comes up in a survey report, even if the property is relatively new.
If you are looking for your next home, contact our team of property experts for help in your search.