No Building Survey or Homebuyer Report – will you take the risk?

Building Survey for larger properties.

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, not understanding that the valuation is not a survey 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 damp, 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 £350 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 or make an informed decision on the property.

A first-time buyers mistake

 A client requested a Home Survey for a property they were in the process of buying. As his second purchase, he was a lot clearer on 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. The buyer pulled out after finding out that the property is a steel frame and in some cases are unmortgageable. His buyer pulled out, and 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 structure of the property. 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, obviously 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.

Only by having a qualified surveyor assess a property are prospective buyers fully informed of the real state of that property, so it should be an essential part of your buying process. 

While surveys can be expensive, they 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 on 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 types of 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 reasonable 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 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)
  • the roof
  • the walls
  • rainwater pipes and gutters
  • windows and doors
  • the garden
  • boundaries, fences and gates
  • special features such as rights of way etc
  • the drainage

Sometimes there are accessibility issues, and in this case, this will be indicated 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.

Booking a survey?

You can book a building survey at any point in the buying process. However, it’s most commonly undertaken once an offer has been accepted on the property. Offers are usually taken on the basis that no major concerns are found upon the survey. Once the survey has been completed, the price can be negotiated based on any significant work that needs to be done.

Condition Ratings on the Report

Green refers to ‘Condition Rating 1’ and indicates that the area referenced needs no repairs and has no area of concern, these should continue to be maintained in a similar way to previously.

Amber refers to ‘Condition Rating 2’ and highlights areas with defects that need repairing or replacing but are not considered as severe. These areas are unlikely to impact the overall value of the property, but are likely to need some maintenance or repair in time.

Red refers to ‘Condition Rating 3’ and highlights defects that are in need of urgent or series repair, need to be replaced or investigated urgently. These are the areas that should be seriously considered as part of the overall purchase. They may be areas that make the purchase void, or they may be areas that warrant renegotiation based on potential repair costs.

Condition ratings for a Homebuyer Report or a Building Survey.

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, and it can lead to sales falling through. However, a ‘bad survey’ doesn’t have to mean the end of a sale. Here’s what you should do next.

Speak to your surveyor

Ask your surveyor to go through the report with you, so you get a comprehensive overview of the condition of the property and understand what the issues are 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 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. 

Another case of not needing a survey

Yesterday, I spoke to a vendor that was selling her property to a first-time buyer. During our discussion, it came to light that she was a first-time buyer when she brought this current property. She also informed me that she had her partner did not have a homebuyer report done when they were purchasing the property.

Why? I asked.

I guess we weren’t as savvy.

Are you going to get a home survey done on your next property?

No, she said, “we know the builder that’s done much work of the work on it, and we know he’s done a good job.”

I was thinking, why would you want to take the risk?

If you’re buying a property with that may have a small extension presented in good condition, it can be tempting not to get a survey.

I thoroughly inspected the property and found some issues. 

The guttering was leaking and required refixing, and ground levels were high around the property. Large amounts of asbestos were found in the roof space and around the house.

Armed with this information, the buyers can now use this information to do one of four things.

1. Go back to the sellers and negotiate the price;

2. Ask the seller to fix the issues;

3. Buy the property as it is;

4. Walk away.

I’m sure when they receive their report they will be really pleased they made the decision to get a survey done. As for the seller, who knows. Will you take the risk?

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