Released On 20th Jun 2018
Can I use my Building Survey Report to negotiate with a vendor?
You’ve received your Building Survey Report. What are your options?
If the condition of the property is generally positive, with no significant defects discovered, you can be assured that it is in a reasonable state of repair. If there are no issues requiring a significant investment of time or money to put the property in good order, clearly that is a positive factor, and there are no logical grounds for going back to the vendor for any reason.
Sometimes a client can feel somewhat dissatisfied, in that they believe that they’ve paid a significant fee to the surveyor and they have found very little wrong with the property. A surveyor can only report on the property as it is, and if it’s in good condition, you have the valuable reassurance that major expenditure will not be required, either now or in the foreseeable future.
The surveyor will have taken the same amount of time to inspect the property to come up with a positive report as he would have done if the report had contained more negative conclusions.
If the report does not read well, what are the options?
Walk away
You could simply walk away from the property, if you’re not prepared to take on the amount of work required to put it in good condition.
Get more information
Before taking this final step, you might want to try to price the repairs that are required, and even progress to the stage of getting further reports if you need to establish the cost, for example, of dealing with rising dampness or re-wiring the property.
Who pays?
There is certainly a strong argument which says that if the scope and cost of the required repairs represents a substantial building project, why should you, as the purchaser, have to spend all of the money to put the property in a good state of repair when it’s unlikely that you’ll be able to get the full cost of these repairs deducted from the purchase price?
Sometimes, a vendor can take the view, when these matters are referred back to them, that they were quite obvious and that you, as the purchaser, should have been able to see these defects, irrespective of a surveyor’s report. They’ll argue that the purchase price you have already agreed reflected the fact that these defects were known, and therefore nothing has changed in the purchase process.
The purchaser could respond that a lay person can’t be expected to be fully aware of the costs of building works that may be required when they are not dealing with the prices and costs of such work on a day-to-day basis.
Defects you were already aware of
We recently carried out a building survey where most of the items that we detailed were known to the purchasers but, when we costed up the repairs (which can be done as a specialist service, if required) the price came to approximately twice the amount that they had anticipated.
In such cases, if the costs of potential repair works exceed your budget, then you should either walk away or negotiate a reduction in the purchase price.
Defects that only came to light with the Building Survey Report
Finally, there are situations where defects are not apparent and are unknown to both to yourself, as the purchaser, but also to the vendor.
The vendor may be blissfully unaware, for example that the slated roof to their property, which is 100 years old, is in an unsatisfactory condition, there being no obvious leakage through to the interior. However, a survey might well reveal that the undersides of the slates are badly spalled and that the roof has reached the end of its useful life. With roof slates likely to slip out from time-to-time in the future, there will be attendant, ongoing maintenance costs requiring constant access to the roof.
In this situation, the recommendation will almost certainly be that the roof be re-slated, which might cost, for example, £10,000. Such a large ticket item would obviously have to be factored into a potential renegotiation of the purchase price.
Why a vendor might resist a renegotiation
The real difficulty occurs when a vendor refuses to renegotiate based on the findings of a surveyor’s report. Often, particularly where properties are not updated for decades, the homeowner who has lived there all that time takes any implied criticism personally – after all, this isn’t just a house, it’s been a much-loved home. Any suggestion by a surveyor that they haven’t maintained the property won’t be well received.
They may take the view that the suggested works suggested are unnecessary; emotion then enters the purchasing process, and some vendors become inflexible and refuse to budge on the price.
In such cases, it’s our experience that most purchasers will feel that the vendor is being unreasonable. The vendor in turn feels that the purchaser is not being fair, and an impasse is reached. The purchaser then reluctantly withdraws their offer.
The ideal negotiation
The ultimate arrangement is often that there is some flexibility in the purchase price, especially where defects only became apparent during the building survey. More often than not, we recommend that, if, for example, £30,000 worth of works are found to be necessary to a property, the costs of the repairs should be split, with £15,000 being taken off the purchase price.
This is not an easy process, but there is absolutely no reason why a prospective purchaser should have to fund £30,000 worth of works that may have arisen because the vendor failed to look after their property properly, often over many years.
Could a building survey save you money on a property you’re thinking of buying?
Call 07711 491000 or email info@jamesrossandcoltd.co.uk for jargon-free advice and a quote.