How understanding a survey report could save your sale
Property transactions fall through at an alarming rate, and the survey is a critical milestone that can often make or break a sale. This article gives tips on reading a survey report and overcoming the issues raised to hold your sale together so you can move.
A survey is a key element of any property sale transaction. If you've bought or sold a property before, you might already know there are three options for a survey to carry out on a property you're buying.
The valuation. An assessment of the property's value that is carried out on behalf of the mortgage lender. This level of survey intends to establish that the property is worth the price being paid. You might think that a survey is supposed to raise issues and highlight problems that the surveyor finds, but this level of survey will only raise very serious problems that could have a negative impact on the value of the property. With this in mind, it is probably not the best idea to rely solely on this level of survey if you are looking for peace of mind about the property's condition.
The Homebuyer's Report. A step up from the basic valuation and will look in detail at the property itself, as well as the valuation. Issues are rated 1,2 or 3, depending on the severity of the issue and the repair cost. Any issues raised will give an indication of the cause of the problem and an idea of how to repair the issue, along with a ballpark figure for the repair cost. It is important to note here that just because the surveyor raises a point in the survey doesn't mean that you shouldn't buy the property. Indeed, the surveyor is just that, a surveyor. They are not electricians or plumbers and can, therefore, not give an accurate quote for these types of repairs. It is best in this instance to arrange for quotes from experienced contractors to look at the individual issues highlighted.
The Full Structural Survey. This is the full report where the surveyor will look into every nook and cranny and perhaps explain the cause of any issues found to assist with your repairs. No stone is left unturned with this level of survey, and the reports can be quite lengthy, but this will come at a cost. Unless you are purchasing a particularly run-down or very old property, a survey at this level might be overkill.
It can be a nerve-racking time, waiting for the survey report to come back, as this can mark a key milestone. If the buyers are happy with the survey report and property valuation, then the sale can move along. If, however, the buyers are not satisfied with the survey, this could be a point of great upheaval as the sale is likely to be renegotiated and is at risk of collapse until it is resolved.
The key point to remember is that a surveyor's job is to find faults. They are not there to wish you well on your new home or to make sure the transaction goes through to completion. They're there to ensure that your new home is safe. So, don't be disheartened if the Homebuyers' Report comes back with lots of 'level 3s'; often, this is just a signpost for you to dig a little deeper in this area to double-check things and is not a reason to withdraw.
So, how can you navigate this milestone and hold your sale together?
It is important to note that even though the report is based on your house, the actual report itself doesn't belong to you. If the buyer refuses to show you the report's contents, that is their prerogative. However, it is almost impossible to discuss the issues openly or come to a resolution between you if there is no transparency. Sometimes, unfortunately, the buyer's mind is made up to withdraw from the transaction, and there is simply nothing you can do about it. But, if there is room for a conversation and your buyer still wants to buy your house, follow this number one tip: -
Understand exactly what the report is saying - A typical 'level 3' rated item on Homebuyer's reports is the electrical system. That is not to say that all properties have unsafe electrics or that every property needs to be fully rewired. As mentioned before, these are signposts. The surveyor is not qualified as an electrician, so this 'level 3' advises that a professional contractor be employed to check the system for you.
Now, there is every chance you need some electrical work carried out to ensure safety or compliance to regulations, but that is not necessarily costly. It could be a simple change that costs less than £200 - hardly a reason to withdraw from a transaction. For all the buyers' concerns, getting to the crux of the issue and an accurate quote will give you the basis for renegotiation. You might decide it is easier to get the job done before completion or reduce the price to accommodate the quote. Either way, there should be no reason for your buyer to withdraw if you take this approach.
Almost a third of property sales fall through in the UK, which is far too high. Of course, circumstances change, but lots of sales crumble unnecessarily at the point of the survey. By reading into the issue properly and obtaining accurate quotes or having the matters attended to, lots of sales could be rescued, saving all parties thousands of pounds in abortive sale fees and getting you moved into your new home. If a buyer withdraws from the transaction, it can lead to additional costs and delays in finding a new buyer, so it's important to manage the survey process effectively to reduce the risk of this happening.
If you have any questions about selling your home, get in touch with our team of property experts today.