BLOG: How to use a negative property survey report to your advantage
Getting a negative survey report back on a property you’ve got your heart set on can be a damning blow. Whilst it is rare for a survey report to come back glowing, having a report identify a serious issue, or else a series of other unexpected problems, could throw the property purchase into question.
However, you needn’t necessarily panic, or think all is lost.
Depending on the exact findings of the survey, it may be worth using the report to your advantage.
Here are some tips on how to do just that…
The starting point when you receive a negative property survey report is to open the lines of communication with the vendor – usually by contacting their estate agent. At this stage, you would inform them that the results of the survey had revealed some unanticipated issues and that you were getting these investigated further.
You will then need to get quotes from independent contractors who can further investigate the issues and provide an estimated cost of repairing them. Armed with these quotes, you can then go back to the vendor and estate agent.
There are two routes that can be followed – you can either put forward a reduced offer that reflects the cost of having works on the property completed, or else maintain the original price, but only on the condition that the seller has the property’s defects rectified prior to exchange/completion.
Don’t forget that in the vast majority of cases, properties that are under offer are considered sold ‘subject to contract’ – meaning that until contracts have been signed, there is no legal obligation for the sale to take place. You will want to use your position in the sale to your advantage as much as possible – although not all sellers will take kindly to overly aggressive negotiation. Ultimately, it depends on how desperate they are to sell, how in demand properties of its type are and how active a market is in a particular area. If the seller refuses to negotiate, or is only willing to meet you part way, you’ll need to decide how much you want the property and whether it’s effectively worth paying over the odds for.
Although you may not want to let anyone down, it’s important to remember that any defects that have been identified will impact a property’s value down the line. There’s also the disruption to consider – where several defects need addressing, or there are one or two major issues that require invasive building work, the enjoyment of living in the property will be temporarily affected – and you may choose not to live in the property at all until the works are finished. Not everyone is equipped to manage such disruption, and therefore you may ultimately decide not to proceed.
Having a survey on a property you’re planning to purchase is always a sensible idea. As outlined above, having either a RICS Homebuyer Report or Building Survey Report helps to ensure you pay the right amount for your property – sometimes acting as a bargaining tool to negotiate the price of a property to better reflect its value.
For more information about the property surveys we offer, please get in touch.
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