Home surveys can be a vital part of the property purchase process. They allow you to gain insight into the quality and condition of the property. After a survey on a house, you can use the results to guide your purchase decision. They may allow you to alter your original offer or make agreements with the sellers. For many homebuyers, it is critically important to complete a home survey and understand the benefits it can bring to your purchase process.
During this article, understand what home surveys are, what their results will indicate and how this can influence the purchase of a property.
Purchasing a House
After finding what appears to be your dream home, you’ll need to place an offer on the property. Within the current property market, this can be incredibly competitive. You may be inclined to place a higher offer to overcome the competing interest. If this offer is accepted, you begin the process of purchasing the house. This doesn’t yet mean you are obligated to complete the transaction however. Whilst you may have competed against several other potential buyers, you still have some time to assess whether the property and its current price, is right for you.
The legal transaction of property from one owner to another is known as conveyancing. During this process home surveys and conveyancing checks are completed. These processes will uncover details regarding the history, defects and value of the property. The buyer will have time to assess this information before legally binding themselves to the transaction by signing the exchange contract.
What are Home Surveys?
The opportunity to complete a home survey occurs during the start of the conveyancing process. The sooner it is completed, the sooner you can use the results of the survey to guide your purchase decision. Your solicitor will incorporate the results as well as your decisions to address certain factors or terms within the exchange contract.
There are three different levels of inspection that can be performed by a licensed surveyor. Whilst each inspection is non-intrusive, there are various levels of depth that a survey can explore, providing more and more information, depending on the selected service. The price, age and type of property will heavily influence which survey is most appropriate.
Property Valuation survey
This is the most basic form of a chartered survey. Its main goal is to make an inventory of aesthetic and obvious defects within the property. This information is used to provide an insight into the current value of a property. Whilst many property owners offer a competitively priced property, certain homes are priced above their true value. These surveys are most appropriate for fairly new homes with minimal defects.
This survey is far more in-depth than its prior counterpart. The homebuyers report gives a detailed report of the condition of the property. Whilst it is not an intrusive inspection, invaluable information can be revealed to help make your purchase decision. This information is utilised most efficiently for slightly older properties
A building survey is the most detailed report into the condition of a property, available prior to purchase. It is recommended that this type of survey be used on older, more dilapidated properties, which may have faced several maintenance issues over time. Structural issues, underlying conditions and required repairs can be revealed during this survey.
Utilising the Results of the Survey
There are several uses for the results of the property that you are considering purchasing. Through the discovery of previously unknown information, certain decisions could be altered throughout the purchase decision. Until the exchange contracts are signed, these changes can occur to the transaction agreement. Your next actions could include:
Renegotiating the agreed price of the property
One of the key results of a home survey is that certain defects or repairs become apparent within the property. Of course, when living within the property, these repairs would need to be addressed. This could create costly expenses that you may not have considered when purchasing a property.
If necessary expensive repairs become apparent as a result of the survey, you could request that the price of the property be adjusted in accordance with these costs.
Determining conditions for the sale of the property
Alternative to renegotiating the price of the property, you could discuss certain conditions for the purchase of the property with the existing owner. Certain sellers may be stuck to the price that they have advertised the property for. Therefore, they may not accept the grounds of your request to alter the price, based on the results of the survey.
Instead, you could attempt to enter conditions into the purchase of the property. This may include certain fixtures or appliances being left within the property, or repairs being addressed before completion. Coming to an agreement based on certain conditions could make the purchase of the property worth it based on the results of the survey.
Making a decision regarding the purchase of the property
After receiving the results of your survey, you may discover that the property was hiding several underlying issues. This could indicate far more renovation work than you were expecting. As a result, you may change your mind about purchasing the property.
During this stage of the process, you are within your rights to drop out of the transaction without facing serious consequences. Using the results of the survey, you may determine that you would be best suited to search for another property.
What happens after a Survey on a House?
After having a survey completed on the house you are interested in purchasing, there are three clear pathways that can be followed within your purchase process.
Dropping out of the property exchange
Overall, the key goal of a home survey is to gain a full insight into the quality and condition of the investment you are about to make. There are plenty of factors that could change your mind. Whether it appears to be too much work, costly repairs or hidden factors that you weren’t prepared to deal with. Fortunately, you can simply exit the transaction by informing the estate agent and your conveyancer.
Whilst no fees will be incurred by exiting the transaction before exchanging contracts, you may still have to pay for the services of your conveyancing solicitor up to that point. There are several tasks to be completed and disbursements to be paid which creates costs for the solicitor, no matter how far through the journey you get.
Negotiating with sellers
If the results of your home survey indicates repairs or costly renovation work, you may consider adjusting the terms of the contract to make the purchase worthwhile. Whilst this practice is entirely acceptable, certain sellers will be more reasonable than others. Being equipped with a competent conveyancing solicitor is key during this process. It is likely that they will negotiate on your behalf to make the changes that you desire.
Continuing with the process
After having a survey completed, you could find that any issues uncovered, you were prepared for. It should be remembered that every property has their unique defects, especially as they increase in age. When purchasing an older home, you likely want to make the space your own. Part of this would include resolving minor issues with aesthetic defects or replacing faulty fixtures. If your survey indicates reasonable results, you can continue with the purchase with no necessary changes.
Adjusting the exchange contract
If you decide to remain with the property purchase, any additional agreements to be made with the sellers of the property should be written into the purchase contract. This ensures both parties maintain their agreements. This process must be completed before the contracts are signed otherwise you might miss the opportunity to make a legally binding commitment.
Once signed, legal action could be taken by either party that do not meet the terms of the contract. Therefore, if the buyer drops out, or the seller doesnt meet an agreed term, solicitor and legal action could become involved. There are several consequences that could be initiated through certain actions. This could include court battles, reparation fees or cancelling the transaction.
Both buyers and sellers should be aware of any changes made to the exchange contract before signing in agreement. Working alongside a professional conveyancing solicitor will allow you to fully understand what it is you are legally agreeing to.
Home surveys can provide invaluable insight into the condition of the property. They could reveal structural damages, aesthetic defects and a range of repairs that would require attending to. Using this information, you can guide your actions after having the survey completed on a house.
On the one hand, you might decide that the property isn’t right for you find another property that is in better condition. Alternatively, after the survey, you could renegotiate your previous agreement with the seller. They may be willing to knock a chunk of the purchase price off, in accordance with the evidence from your survey.
Overall, home surveys are vital for preparing for your future and the purchase of a particular property. Without the survey, you wouldn’t be able to gain access to defects or required repairs in the property without exploring it yourself. By this point, you could have used up all your cash purchasing the house and have nothing left to cover the cost of necessary renovations.