Renegotiating a house price after a survey
So, you found a property that ticked all your boxes. But now the results of the house survey have come back – and it's bad.
What's a buyer to do?
Renegotiating your original offer is a smart choice – but where do you start?
Read on to find out.
So, how bad is bad?
After arranging a house survey, there's little a buyer can do but wait – and hope that the report will come out clean.
Unfortunately, though, it isn't unusual for problems to be thrown up at this stage. This is a common reason behind many of the 1 in 4 house purchases which fall through in the UK.
But before you panic, call your surveyor, and ask them to take you through the results of the survey. They'll be able to give you an idea of just how bad it is – and the costs involved in rectifying the problem.
So, whether it's timber rot or a roof full of cracked tiles, if your dream property has been revealed to be less-than-perfect following inspection, you have a few choices going forward.
You could always withdraw your offer and continue your search for your dream property. This is something of a 'nuclear option' as it will mean kissing goodbye to the property altogether.
Issues like damp are common in older properties. They might not be severe, and you might be surprised at how simple such problems are to fix.
In most cases, a compromise can be reached with the sellers, which doesn't involve you having to start your property search from scratch.
Suppose the costs of the repairs are likely to exceed 10% of the property's overall value, and you do choose to pull out of the purchase. You can reclaim costs already spent on the sale (such as surveyor's fees) if you're covered with Home Buyer's Protection Insurance. If you haven't had your survey yet, we recommend getting this cover in place ASAP.
The second option is to continue with your offer following a problem identified by a home survey. It's less common, but in some cases, you may not feel in a strong enough position to renegotiate your original offer.
Continuing with the same offer following undesirable results of a home survey would be reflective of getting a real bargain to begin, within the knowledge that the place needs work.
Ultimately, it depends on how otherwise desirable the property is and how confident the seller is. For example, if it's within spitting distance of a London tube line, the sellers might not feel the need to offer a discount for something like a few rotten window frames.
Renegotiating after less-than-perfect survey results is usually the best option. Luckily, your offer is not legally binding until the exchange of contracts, so it's well within your rights to change your mind on what you're prepared to pay. Here's how:
- The first step is to speak to the surveyor and determine the extent of the issue. Is the problem going to cause other difficulties down the line, or is it relatively well-contained?
- You are likely to need another, more detailed survey to get an idea of the true extent of the issue. For example, has subsidence caused enough shifting soil to cause damage to the building's structure? Is that one damp wall a result of a leaky pipe outside, or is it the (more sinister) ground moisture at fault? In cases like Japanese knotweed, it's vital to know how far the roots have spread and if they've caused irreversible damage to foundations. Regardless of what the issue is, highlight the relevant sections in the home report and collate the relevant comments made by the surveyor – you'll need this when making your case for a lower offer to the seller.
- The next step is to seek independent quotes from specialists to estimate what it would cost to fix the problem. Get a few quotes, and don't look for the cheapest available. The idea is to demonstrate to the seller that this is going to cost you an arm and a leg to rectify – so they should be prepared to drop the property price accordingly.
- Then, you're ready to make your new, lower offer. Putting it in writing is the best option – either in a letter or email. You can go via your estate agent or direct to the seller, copying in your estate agent. Layout the evidence you've gathered from the survey and the quotes you've collected to rectify the work, along with your revised offer.
- The new offer should reflect the cost involved in resolving the problem(s) identified in the house survey and the inconvenience the rectification will cause you (or any buyer) in terms of time, mess, and disruption.However, try not to be too specific about why you and your family would find rectifying this issue so inconvenient. The idea is to show the seller that any reasonable buyer would find dealing with the issue off-putting – and agree to a lower price - not make them think that you're a high-maintenance buyer.
- You also have another option – to ask the seller to rectify the problem(s) identified in the house survey before proceeding with your original offer. If you agree to this, be prepared to wait while the seller shops around for the cheapest contractor. Always get any work professionally and independently checked to ensure the original problems were resolved to a proper standard – this is not the time to rely on good faith.
The bottom line
When the buyer wants to renegotiate after survey results throw up a nasty surprise, it's not the end of the world.
Undesirable survey results aren't uncommon, and they usually result in a renegotiation of the offer price. This is relatively standard, and if you present a good case, the seller is generally flexible and will accept a lower offer.