What should I do following a bad home survey report?

Serious defects on a survey may tempt you to walk away. Find out how to sort deal-breakers from minor issues, and how to renegotiate a better purchase price.

Types of home survey

There are various property surveys available to homebuyers. In this article, we refer to the  RICS Home Survey – Level 2 (previously known as the Homebuyer Report) and the RICS Home Survey – Level 3 (previously known as the Full Building Survey).

Both reports will outline any pressing issues and recommend the next steps. The surveys are extensive, covering areas like:

• Damp
• The condition of the roof
• The condition of drainage and insulation
• Rot or woodworm
• Electrical issues
• Japanese knotweed
• Subsidence
• Recommended action on repairs

RICS Home Survey – Level 2

The RICS Level 2 Survey is the most common choice for home buyers and is suitable for standard build properties (brick and tile) that have not been structurally modified. he report will highlight any issues using a traffic light system: e.g. any areas flagged as red will need urgent repairs.

RICS Home Survey – Level 3

The RICS Level 3 Survey is recommended for older, larger and non-standard construction properties. It would also be a better choice for flats or houses that require a lot of work.

A Full Building Survey takes longer to carry out and it provides more detail about any defects discovered by the surveyor. The Full Building Survey does not include a valuation but you can usually ask your surveyor to include one for an additional fee.

What is an 'adverse survey'?

An 'adverse survey' is an 'inside baseball' property term use to describe a survey that has identified problems with a property. In short, a bad survey.

My survey has come back with 'adverse results'

Survey reports are designed to highlight defects and can read like a list of reasons to pull out of buying the property.

If the survey has identified areas of concern, don't panic or act in haste. Call your surveyor and ask for more detail on specific areas of concern.

Speaking to the surveyor can give you more context and a sense of proportion - the issue may not be as bad as you think.

Ask your surveyor exactly how serious the items highlighted are. The surveyor may be able to recommend a further specialist survey or a tradesperson who can provide further insights.

You could also ask the surveyor to meet you at the property to show you the problems.

Your conveyancing solicitor may also be able to offer pragmatic advice on what to do.

Get advice on cost and timelines

Once you understand the issues highlighted in the survey, speak to a few builders or relevant tradespeople and find out:

• the likely cost of repairs (get several written quotes)
• how long the repairs will take
• the level of disruption involved in carrying out the repairs

If you take on a property that needs serious repairs, you may have to move out while the repairs are carried out. You may have to delay moving in. You may get the property at a discounted price as a result of the defects, but is it worth the upheaval?

Now is the time to weigh up how much you want the house against how much time and money needs to be spent on it.

Talk to the seller

If you have obtained quotes for repairs in writing, you can use these as the basis for renegotiating the purchase price.

It may be that the property's defects are already reflected in the asking price. If the property was advertised as ‘in need of renovation’, the cost of remedial works may be priced in already. In this case, the base case for a price reduction may be ‘fuzzy’.

The Homebuyer Report will include an independent valuation – with a Full Building Survey you will usually need to request this as an extra.

If your surveyor has valued the house at less than your initial offer, use this to negotiate alongside any repair quotes you have obtained. The renegotiation can be handled through the estate agent.

Don't get emotional about decision making

Buying a home can be a heart-led process and adverse survey results can be disheartening.

If you still want to proceed with the purchase, maintain positive and business-like relations with the seller. Keep the facts and figures in mind and make sure your offer is fair.

If there are particularly severe defects, such as cracks indicating structural movement, severe damp or a roof that needs replacing, you should expect a cost representative reduction in price.

However, this is still a negotiation. The level of price reduction may depend on how keen the vendor is to sell or how much interest they’ve had in the property from elsewhere.

Set your financial limit and stick to it

Always keep in mind how much you’re willing to pay based on the defects that have been uncovered. Try to make a business decision, no matter how much you love the property.

If you take on an expensive headache that will require you to rent somewhere for months during the remedial works, it may not seem like the dream home you thought it was.

An adverse property survey report isn’t usually a reason to panic, however. Get as much detail as you can, do the necessary sums and communicate with the seller.