For most people, buying a house is the most significant financial move they will make. When you are spending a lot of money on a property, it is natural to want to know if it’s up to scratch. A building survey is a worthwhile investment for any prospective buyer, as they can flag up issues not visible to the naked eye during a viewing. They can also provide information about repairs that may be required and costs buyers may incur in the future. But one of the things most people want to know is whether they can renegotiate after a survey if faults are found.
If you have received your house survey from an RICS surveyor, and it has raised concerns, you may be thinking about backing out or modifying your offer to account for the cost of remedial work. It is common to renegotiate after a survey. A study conducted by the consumer group, Which? revealed that around 67% of buyers are able to adjust offers or ask the seller to carry out repairs following negative survey findings. This guide tells you how to go about doing it.
What are grounds for renegotiating an offer after a survey?
If you want to buy a house and you arrange for a survey to be completed, it’s wise to consider the findings before you proceed and exchange contracts. In most cases, properties are sold subject to contract, which allows room for manoeuvre if the survey flags up issues that you were not aware of before you made an offer. The most common problems detected by house surveys include:
- Roof problems
- Lack of safety testing for electrics
- No carbon monoxide or smoke detectors
- Lack of evidence of building regulations approval
- Japanese knotweed
How to renegotiate after a survey: What are the options?
There are various options to explore after your survey. These include:
1. Proceeding with the acquisition
In many cases, buyers will be aware of defects or problems that are highlighted in the survey. The most important decision to make is whether you want to proceed in line with the agreement you have already made with the seller or you’d like to renegotiate. If the problems are minor, you already knew about them, or you were planning to do work to the property, which would eliminate issues flagged by the survey, it makes sense to go ahead. Examples of common issues that you may encounter include replacing a window, updating the flooring or buying a new boiler, for example. If you know about these problems, or you’re willing to cover the cost as part of plans to revamp the house, you can proceed without changing the terms or modifying your offer.
If the survey identifies problems that you were not aware of, or there are issues that are more complex or costly than you thought when you made the offer, you may want to consider renegotiating. There are two main options at this juncture if you still want to buy the house. You can revise your offer or liaise with the seller and discuss the possibility of them doing the work required. Some sellers will be open to undertaking jobs to secure the agreed offer, while others may prefer to accept a lower price to speed up the sale.
If you want to renegotiate, you will need to contact the estate agent. Call your agent or visit the branch and explain the situation. Take the survey with you and highlight the areas that are causing you concern. The agent can then contact the seller and get back to you once they have decided what to do. It is possible that the seller may not want to renegotiate. In this case, you can decide whether to go ahead and cover the cost of repair work or pull out.
Before you suggest a figure to deduct from the offer price, it’s beneficial to contact the surveyor who did the survey. You can ask questions about the defects identified and the potential costs to get an idea of how much you need to subtract to make the house affordable for you. If you were already at the top of your budget when making the offer, for example, and the surveyor suggests that you will need to spend £10,000 on the house immediately, it may not be viable to proceed unless the seller agrees to accept a lower offer.
3. Walking away
The final option to consider if you have received a survey that flags up numerous or severe defects is walking away. If you cannot afford to spend money on the house, or you don’t want to take on work or wait for months to move in, you may decide that you don’t want to proceed. This may be the case if the survey flags up issues with the roof or signs of subsidence, for example, which can be expensive and take months to rectify. If this is the only option, contact the estate agent and outline your position. There is a possibility that the seller may be open to negotiating if they are desperate not to lose the sale.
What happens if it’s not possible to renegotiate after a survey?
If you want to renegotiate an offer after a survey and the seller is unwilling to cooperate, you have three choices. You can either compromise and accept the offer the seller is making, you can proceed and cover the cost of work yourself, or you can back out and withdraw your offer. This is a personal decision and it will boil down to how you feel about the house and whether you still want to buy it despite the survey.
Home surveys are designed to provide information about the structure of a property. They can be incredibly beneficial for buyers, especially those purchasing old properties and homes that need a lot of TLC. If your survey flags up serious problems or issues you weren’t aware of, it’s wise to try to renegotiate your offer. You could lower your offer or ask the seller if they would be willing to do the work. If the seller says no, you should think carefully about whether or not you want to proceed.
You may also find our home surveys landing page useful.
What is the average price reduction after a survey?
The change in house price clearly varies and depends on lots of factors. But research by Which? shows that house price reduction, on average, can be as much as 5-10%. This is a significant saving, especially if your prospective house is priced highly. For example, if the price of the property is £400,000, you could save up to £40,000.
Of course, this depends on what the survey reveals. Regardless, it’s important to be aware of the impact a survey can have on house price. Furthermore, it’s critical to know how to renegotiate after a survey.
If you’re looking to get a RICS home survey, get in touch with CJ Bloor today.