No Building Survey or Homebuyer Report – will you take the risk?
Sometimes in the surveying industry, we come across homebuyers that decide not to get a house survey. Often this can be down to the costs or thinking that the property is in good condition. Buying property is expensive. Can you afford to take the risk of not getting a Building Survey or Homebuyer Report?
Churchill Insurance conducted a study on property surveys in 2016. The study revealed, more than half of property owners, who did not get a survey, needed significant work done to their property within a year of moving in. (Churchill 2016)
The research also revealed, the top three problems detected are dampness, roof issues and subsidence.
Avoiding a property survey is a costly mistake for many.
So, what are the types of surveys?
RICS Surveyors can provide homebuyers with a Building Survey or a Homebuyer Report. The home survey can cost as little as £500 and could save you, the potential homebuyer, thousands of pounds if there are defects. Many homebuyers don't realise that they can use a home survey to negotiate the price of their next property and make an informed decision on the property.
A first-time buyers mistake
A recent client requested a Building Survey for a property she was in the process of buying. As this was a second purchase, he was clear about the home buying process. He did not get a survey when he purchased his first property. However, the first time buyer that wanted to buy his house did.
Unfortunately, the buyer pulled out after finding out that the property had a steel frame.
He was unable to sell the property to another buyer.
Not knowing about construction, the seller of the property had no idea what he brought, and the valuer from the bank failed to identify the property's structure.
Now he had a property that he could not sell and was feeling stuck because there was no way he could afford the other house. While this is an extreme case, it does happen. He managed to get it rented, but that's another story.
His main reason for not getting a survey in the first place was because the mortgage valuation stated that the property was okay to lend on.
He also thought that the extra cost of a home survey was not worth it. In his case, this was an expensive mistake.
Having a qualified surveyor inspect a property is an essential part of your buying process. Surveys can potentially save you thousands of pounds as you can identify risks associated with the property purchase.
So, what is a house survey should you get?
I mentioned earlier; there are two main types of survey, the Homebuyer Report and the Building Survey. There are fundamental differences, but there is a survey for any property. In all cases, we recommend an RICS Survey, especially if:
you have any worries about any part of the property
you feel unsure about what sort of condition the property is in
you are looking to buy an old or unusual property
the property has a thatched roof, is timber-framed or steel-framed
the building is listed
What is a Building Survey?
A Building Survey is a detailed and comprehensive look at the condition of a property, dealing with hard to reach places and structural issues. Although one of the more expensive survey types, the level of detail in the report makes it vital when buying older properties. The report will highlight any issues and give an idea of how they are going to remedy them.
You should commission a building survey if you are buying:
is an older property
more unusual building
it has complications of any sort
What is a Homebuyer Report?
A Homebuyers Survey, also known as a Homebuyers Report, is the most common type of property survey available and can be used for all properties. It will flag significant issues with your home but is not as detailed as the Building Survey.
A Homebuyer Report is a health check on a property. It's suitable for properties that are less than 80 years old in a good state of repair.
The HomeBuyer Report is concise and uses a transparent traffic-light coding system to highlight defects.
What does the Homebuyer Report Include:
The HomeBuyer Report includes details of a current valuation of the property; this is optional as of Autumn 2016
An estimate for the cost of rebuilding the property for insurance purposes
An assessment of any damp-proofing, drainage or insulation in the building.
The Property Inspection
The surveyor looks at parts of the property that are immediately visible.
Areas inspected inside include:
the loft space
all the rooms within the property, including the ceiling, walls, floor, windows and doors, heating, electricity, plumbing
other amenities (e.g. basins, sinks, toilets etc.)
fixtures and fittings
Outside areas inspected include:
the chimney stack(s)
rainwater pipes and gutters
windows and doors
boundaries, fences and gates
special features such as rights of way etc
Sometimes there are accessibility issues, limitations are noted on the report. For further information, you should read the terms sent by the surveyor.
The safest choice is a Building Survey, which provides a full breakdown of the fabric and condition of the property. The report will include diagnosis of defects, along with repairs and maintenance advice.
With this type of survey, the surveyor lifts carpets and floorboards that are not tightly fitted. The surveyor should also remove bath panels and bring a ladder to access the roof and other areas.
However, it's most commonly undertaken once your offer is accepted on the property. Offers are usually taken based on significant concerns.
Once you get the survey, if there are some defects, you can negotiate the price.
Condition Ratings on the Report
Green refers to 'Condition Rating 1' and indicates that the area referenced needs no repairs.
Amber refers to 'Condition Rating 2' highlighting areas with defects that need repairing or replacing and are not considered severe. These areas are unlikely to impact the overall value of the property.
Red refers to 'Condition Rating 3' and highlights defects that need urgent or series repairs, require replacement or further investigation urgently. These are the areas that need further consideration before you purchase.
What If You Get a Survey Report with Issues
A survey report can make or break a property deal. Buyers often get cold feet if problems arise from a survey, leading to sales falling through. However, a 'bad survey' doesn't have to mean the end of a deal.
Here's what you should do next.
Speak to your surveyor
Ask your surveyor to go through the report with you so you. The surveyor can give you a comprehensive overview of the property's condition. They will also help you to understand the issues and their implications.
Get some quotes
Get at least two quotes from independent tradespeople so that you can compare scope and price.
Negotiate the house price
If your survey uncovers issues, you can use it to renegotiate the price.
Your offer is Subject to Contract (STC), and you're not legally bound to buy the property until the point of exchange.
Will you take the risk of not getting a building survey or homebuyer report?
I started the Shape Surveyors in 2011 after changing careers. As an ordinary house purchaser, I mistakenly believed that the Valuation was a survey and went ahead and purchased my first property. This old Victorian house was presented in excellent condition, totally refurbished. I fell in love with the place, ready to make it my home. However, three months later, dampness, movement and rot were uncovered. Several builders inspected the property, and the recommendation was to strip the house back and start again. It needed a rewire, damp proof course, treatment for dry rot and timber infestation. The news was devastating. The minimum quote was £27,000. I had just put all of my savings into this purchase and did not have enough money to renovate the property.
I started researching. In those days, I did not know anyone who had a survey, let alone a surveyor. The Homebuyer Report would have highlighted all of these defects and allowed me to negotiate the price. So I decided to go back to university to become an RICS Surveyor. I did not want this to happen to me or anyone else again. So, after years of training and experience in housebuilding, project management, and residential surveying, I decided to provide a comprehensive service to homebuyers.
I’m on a mission to keep you informed throughout the home buying process, from viewing the property to closing that critical sale, whether you’re a first-time purchaser, upsizer, downsizer or investor. Unfortunately, property defects are often hidden.