Buying a property is a major financial commitment, and yet recent research carried out by Direct Line suggests that nearly 100,000 residential property sales in 2019/20 took place without any kind of property survey. Of course, it should make complete financial sense to carry out some sort of due diligence before you sign on the dotted line, so where’s the problem?
In this article, we’ll take a look at some common misunderstandings and provide no-nonsense advice on why and how to get an independent home survey before you buy.
A mortgage valuation is not enough
One of the most common misconceptions is the belief that a mortgage valuation is all you need – but this is simply not the case. Not only is a mortgage valuation not a property survey, it is carried out on behalf of the lender for their sole benefit, meaning you’re not even entitled to see a copy of the report. Most mortgage valuations consist of a 20 minute inspection and a report that, at best, will give you a few lines of general advice, whereas a survey will allow you to enter into the purchase with your eyes open.
No ‘nasty surprise’ expenditures
Many homebuyers mistakenly believe that a survey is a needless expense. But, just as you wouldn’t buy a second-hand car without inspecting it first, the same surely applies to what may well be the most expensive purchase you will ever make? Spend a few hundred pounds on a survey and get clarity about the condition of the asset you are about to invest in, including unexpected problems that may cost thousands of pounds to remedy later on. According to Direct Line’s research, homebuyers who did take out a survey were able to lower the purchase by an average of £5,744.
Valuable independent expert advice
The purpose of a home survey is to identify any serious issues and building defects such as damp, subsidence, timber decay or roof problems, empowering you to make the right purchase decision. Independent advice from a highly qualified RICS Chartered Surveyor, a building professional with years of experience in the field, is the only way to provide you with an insight into the condition of the property. Without this knowledge, you’re effectively buying blind with your fingers crossed that it will all turn out well. That is a huge risk to take.
Which home survey should you choose?
The Royal Institution of Chartered Surveyors endorses three types of home surveys that their members will conduct: RICS Condition Report (Level 1), RICS HomeBuyer Report (Level 2) and RICS Building Survey (Level 3). Commission one of these professional property inspections and obtain independent expert advice and guidance from a qualified, fully regulated and insured property expert that you can trust.
Your choice of survey depends on the characteristics and condition of the property you have your eye on as well as your plans for it. As a layperson, chances are that you will need help to decide which is the right level of survey for your situation. Any decent RICS Chartered Surveyor should be only too happy to talk you through all the options and guide you towards the right choice of survey. In the meantime, here is a summary of what each survey offers:
1. RICS Condition Report (Level 1)
Of the three RICS endorsed home surveys, the Condition Report is the least detailed (and cheapest) option. As such, it is primarily aimed at conventional new-build homes or recently constructed properties that appear to be in good structural condition, have a traceable maintenance record and show no obvious defects.
This is a Level 1 survey, meaning you will receive a basic overview of the property in question. All the different parts of the building will be assessed by way of a traffic light rating and the surveyor will highlight any significant issues found but without going into detail. If all you need is reassurance, having a simple RICS Condition Report carried out by an independent surveyor will give you added peace of mind and confirm your thoughts that the property is good to buy.
2. RICS HomeBuyer Report (Level 2)
The HomeBuyer Report is the go-to survey for most modern homes. It provides more detail than a Level 1 report and is designed for conventional properties built in the last 70 years or so that are in a reasonable state of repair. The survey report is based on a non-invasive investigation of all visible and accessible areas of the property and grounds that should take at least a couple of hours. It does not include the lifting of floorboards or moving of furniture – only obvious surface-level problems can therefore be identified.
The report follows a very clear, user-friendly structure. A traffic light system is utilised to indicate the extent and urgency of any defects found, with a summary given at the start of the document. The purpose of the RICS HomeBuyer Report is to make the buyer aware of any significant problems with the property, such as subsidence, damp, roof defects and timber decay. Advice will be given on what repairs are necessary and ongoing maintenance required, and anything that doesn’t meet current building regulations will also be highlighted. Some but not all surveyors include a market valuation as part of the report.
3. RICS Building Survey (Level 3)
A Building Survey, formerly known as a full structural survey, is the most comprehensive investigation endorsed by the Royal Institution of Chartered Surveyors. If you are considering the purchase of a property that was built more than 50 years ago, or any building that is in poor condition, has had a history of alterations or that you are planning to refurbish, getting a full RICS Building Survey is highly recommended before you sign on the dotted line. The same goes for large properties or anything quirky or non-standard.
You can expect to receive a comprehensive list of all defects along with advice and recommendations on repairs or maintenance issues. A structural survey will provide you with a detailed insight into the condition of the property, with all the necessary checks required to give you the fullest breakdown of any issues found. It will also contain projected costs and timeframes for any work that is required, as well as a market valuation.
What can you do after a ‘bad’ survey?
Whichever survey you choose, some minor niggles should probably be expected. After all, it’s the surveyor’s job to pick holes. However, what do you do if the property you have your heart set on turns out to have major issues? It is by no means unusual for the findings to flag areas of concern, regardless of the age of the property. Some of the most common defects revealed by home surveys include damp, decay and wood rot, roof and drainage problems, structural movement and non-compliant plumbing and electrics.
While a poor survey result can be immensely frustrating, it’s important not to panic. Take your time to digest the findings and discuss them with your surveyor before you choose one of these four options on what to do next:
1. Take no action and proceed as planned
A serious issue with the building does not have to be a problem. For instance, if you are buying a fixer-upper and the survey has flagged up ancient electrics, you may not be unduly worried if you’re planning to rewire the property anyway. Assuming that the agreed sale price accurately reflects the current condition of the building, you can use the insights gleaned from the survey to help you draw up a realistic renovation budget and to-do list.
2. Ask the seller to fix the problem
Your next option is to share the relevant survey findings with the seller and ask them to carry out the necessary repairs before contracts are exchanged. Be knowledgeable about the specific defect you wish to remedy, how much it will cost to fix, and whether this is a realistic request in the timeframe available. If the seller agrees to, say, fix a leaky roof, do make sure there is a checking system in place to confirm everything has been completed as promised.
3. Ask the seller for a price discount
If the issue at hand cannot be sorted out quickly or you would prefer to do it yourself, use the survey findings as a tool to help you renegotiate the agreed price. One of the main benefits of getting a survey is that it gives you compelling evidence from an independent expert along with a clear idea of the financial size of the problem. While the seller is under no obligation to accept your request for a discount, a compromise solution can usually be agreed.
4. Change your mind and abort the sale
According to English law, any offer to buy a property is ‘subject to contract’, which means you are not legally bound until contracts are exchanged. In other words, if the survey findings are unsatisfactory – for instance, there is a history of subsidence that will affect the property’s future saleability – and you no longer wish to proceed, you do have the option of simply walking away.