A bad house survey report – what to do next

A survey report can make or break a property deal. Buyers often get cold feet if problems arise from a survey and it can lead to sales falling through. But a 'bad house survey report' doesn’t have to mean the end of a sale. Here’s what you should do next.

Angela Kerr Director, Editor

Speak to your surveyor

If you have had a bad house survey, ask your surveyor to go through the survey report with you so you get a comprehensive overview of the condition of the property and understand what the issues are and their implications. The surveyor may be willing to walk around the property with you again, if you didn’t arrange to do so in advance.

Some surveys are more thorough than others. Most rank the problems in order of severity and urgency. A Homebuyer survey (or Homebuyer report) rates defects with a traffic light system while a full building survey is more thorough and goes into detail about the defect itself and advises you on the next steps you should take.

If the report has flagged something that needs further investigation, the surveyor should be able to tell you what they mean, whether it is a major or minor issue, and recommend what to do next. For example, whether you need to call in a builder, get a specialist involved or if it is just something you can speak to the seller about.

Your surveyor should answer any questions you have regarding the survey report at no extra cost.

27% of house sales have fallen through so far in 2021 as buyers received bad news from their survey and changed their minds, according to Quick Move. There is no right or wrong about what you do next. It’s a personal choice, based on the information you have to hand.

Do you need a second expert opinion?

Now that you have your survey report and have spoken to the surveyor, you may feel reassured and informed enough to proceed with the purchase. If not, now is the time to call on the experts to investigate further.

Find a specialist, tradesman or builder to give their opinion on the severity of the problem and how quickly it would need remedying. They can put things into perspective and help you feel more positive about your dream home. Or they may scare you off completely. But at least you’ll have had the reassurance of a second opinion before you walk away.

It could also be that your surveyor identifies structural issues and advises you to have a more detailed structural inspection.

Find out how much it will cost to fix the problem

Get at least two quotes, so you can compare scope and price. Always use someone impartial – i.e. not a tradesman that the seller or their estate agent recommends. Get an idea of whether you could do the work over time (and so save up/budget for it) or whether it needs doing urgently.

Try to get quotes in a timely fashion so the seller does not get frustrated and starts looking for another buyer.

Common problems surveyors come across

A survey will not pick up on every major issue. Think of it as a tool that you can rely on but be aware that things can slip through the net. More often than not, surveys aren’t invasive and it isn’t possible for surveyors to look in every nook and cranny. But they should highlight all the major issues.

Here are some of the common problems surveyors come across:

Negotiating the house price after a bad house survey

If your survey uncovers issues, you can use it to renegotiate the price you’re willing to pay. Your offer is Subject to Contract (STC) and you’re not legally bound to buy the property until the point of exchange. So at this point it is reasonable for you to go back to the estate agent with this new information and a revised offer. Sometimes the urgent improvements required can make the purchase unaffordable, so you’ll be looking for a discount to match your newly identified costs.

But when it comes to how big a discount you can get, there are no rules. It depends on how much the seller wants to sell, how much both parties are willing to compromise and comes down to negotiation. If you’re buying in a market where properties are in short supply, for example, your seller is in a better position and they could refuse to give you any discount.

Don’t be shy about renegotiating on the price but keep it sensible and in line with costs of the work needed. You could share the relevant extracts of the survey with the estate agent and seller, with the quotes for work that you have, to show there is a valid reason to renegotiate the price.

In some cases you may want the vendor to fix the problem(s) flagged in the survey themselves, before you exchange contracts. This is especially reasonable if the survey report suggests the value of the property is impacted by the problems identified.  This work could form part of the contract specifics. Speak to your conveyancing solicitor about the best way to handle this. You’ll want to get evidence work is done to a good standard, in line with regulations, and get a copy of any receipts or warranties.

Don’t forget the seller will also have limitations on how much they can take off the sale price as they will often need the money to afford their onward purchase. So while “don’t ask, don’t get” definitely applies here, so does the old adage “a house is only worth what someone is willing to pay for it”.

Do I need to share my survey with my mortgage broker?

No, the house survey you pay for is just for you. You can share it with whomever you like, but certainly won’t be asked to share it with the mortgage broker.

If however the valuation survey conducted by your mortgage broker has revealed some issues, such as japanese knotweed or spray foam insulation the property which you buy could be in for a down valuation which in term may reduce the amount you can borrow. Delays while further investigations are carried out could result in your mortgage deal expiring. This is where having a fee-free mortgage broker on hand is invaluable in finding solutions with your current or alternative lenders.

So in summary:

• Don’t panic when you read the survey report – your surveyor should answer any questions you have at no extra cost
• Consider getting the experts in to further investigate and/or cost for repairs
• Use the survey report and quotes to renegotiate the sale price so you can afford to do any essential remediation work or ask for works to be completed by the vendor before the point of exchange