How to Negotiate House Price after Survey
In an ideal world, all house purchases go well and surveys reports reveal no problems. Unfortunately, survey results are not always non problematic, and purchasers may face a logistical headache if they discover deficiencies or defects, such as structural integrity issues. Fortunately, if you are afraid that the expense of correcting these difficulties would exceed your budget, you have choices.
A survey is performed prior to the purchase of a property to evaluate the soundness of the home, as well as to identify any structural concerns, faults, and if the price you are paying is appropriate. There are several sorts of surveys, depending on the type of property – read more on our “What survey do I need?” guide.
In most circumstances, surveys will be carried out and returned with few or no problems, allowing the transaction to proceed as usual. However, if the survey reveals any concerns with the property you want to purchase, it may be a chance to reduce the price.
If you have had your offer, subject to survey, accepted and then your surveyor comes back with a series of problems, should you renegotiate or just accept that issues need to be sorted when you move in?
The answer to this depends on three things:
- How many of these issues are severe (usually are expensive to rectify)
- Can you afford fixing them
- If you are still happy to go ahead with the purchase (better walk away if you are not comfortable with the situation)
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Before you do anything else, talk to your surveyor about the consequences of anything mentioned in their report. They will advise you on the next steps, whether additional investigations are needed, and provide you with a detailed breakdown of the survey, all of which is included in the service (subject to what survey level has been chosen). Don’t be reluctant to seek clarification!
- Ensure that you have done your homework. A specialised damp survey (if has been requested for further investigation), for example, will reveal the degree of the problem and the cost of repairs, which might vary greatly. If you can gather and show multiple quotations for any maintenance work or additional legal expenses to back-up your request to cut your offer price, the vendor is more likely to agree.
- Be realistic about what is considered a severe problem with the property. A surveyor is required to report any existing or probable future concerns, no matter how minor. Your seller will not considerably reduce the price for minor aesthetic changes or relatively inexpensive fixes. The seller is unlikely to lower the price due to work that you could perform yourself with a little elbow grease or that isn’t required in the near future.
- Contact the vendor as soon as possible to communicate the results of your survey report so they are aware of your desire to renegotiate. They may be unaware of the concerns raised by your survey, and if they are part of a chain, then are likely to remedy any issues as soon as possible.
- If you run into excessively expensive issues or red tape, don’t instantly walk away. There is always the possibility to take out indemnity insurance for matters that cannot be addressed or would cost a significant sum to settle, such as work done without planning approval, violations of a restrictive covenant by a past owner, or no formal right of easement.
- If you have reached an agreement with the vendor that they will complete remedial work before you buy the property, don’t forget to include this information in the contract, along with the specific details of the work to be carried out. If it isn’t in the contract, they are not legally obliged to undertake the work.
- Don’t wait until after you have exchanged contracts to try and negotiate a different offer price. Your sale is still subject to contract before you exchange, and you can withdraw your offer with small, if any, damages. Once contracts have been exchanged, you are legally obligated to pay the agreed-upon amount unless the vendor agrees to negotiate, and you will forfeit your deposit if you back out of the deal. You may also be subject to additional penalty fines.
- Remember that when it comes to pricing, the seller will have a bottom line. They will very certainly need the proceeds from this sale to support the acquisition of their next home, therefore they will only be able to reduce the price by a certain amount. At the end of the day, the property’s worth is determined by what a buyer is prepared to pay and what a seller is willing to accept.
Simply being honest about your survey results and the prices to correct the faults is the greatest method to bargain with the vendor or estate agency. You could indicate that the RICS building survey revealed concerns that you were not aware of when you made the offer, and that you expect these issues to be resolved.
You need estimates from independent contractors who can look into the problems more thoroughly and offer an estimated price for fixing them. Then, present your surveyor’s list of particular issues to the vendor and estate agent, along with your opinion of a more reasonable offer.
The seller may ask for follow-up reports so they can conduct their own inspection. Be prepared to haggle and be realistic with the price you’re willing to accept. And keep in mind that each negotiation is unique and is no way to determine how long will take and if the renegotiation of the house price will be successful or not.
However, here are our summarised tips for how to negotiate house price after survey:
- Be honest and transparent with survey findings
- Listen to the advice from your estate agent, conveyancer, and surveyor; they are professionals in their fields and are there to help you.
- Be patient and be prepared to compromise; do not come impatient or aggressive and be ready for a lot of haggling.
- Do your research and be as informed as possible; thorough research and a professional opinion of the building condition will provide the seller with evidence of their property condition.