Navigating a house survey can be a pivotal moment in the home buying or selling process, as it sheds light on the property’s condition and potential issues. However, when faced with a bad house survey, it’s essential for both sellers and buyers to understand their options and take appropriate steps to address any concerns.

What is a house survey?

A house survey, also known as a property inspection or building survey, involves a thorough examination of various aspects of a property, both inside and out. The surveyor evaluates the structural integrity, condition of the building materials and the presence of any defects or potential problems.

There are several types of home surveys available to property buyers, each offering varying levels of detail and coverage:

RICS Condition Report: the most basic survey, providing an overview of the property’s condition. It highlights any significant issues that need attention but does not provide detailed advice or valuation. Suitable for relatively new or standard properties in good condition.

RICS Home Condition Survey: similar to the RICS Condition Report but provides more detailed information on the property’s condition, including advice on repairs and maintenance. Suitable for all types of residential properties.

RICS HomeBuyer Report (HomeBuyer Survey and Valuation): a more detailed survey designed to identify any significant defects or problems with the property. It includes an assessment of the property’s condition, advice on necessary repairs and maintenance and a valuation. Suitable for most conventional properties in reasonable condition.

RICS Building Survey (formerly known as Structural Survey): the most comprehensive type of survey available. It provides a detailed analysis of the property’s structure, including potential defects, recommendations for repairs, and advice on maintenance. Suitable for all types of properties, especially older or non-standard properties, or properties in poor condition.

What constitutes a bad house survey?

There are a range of different factors that may cause red flags to come back on a house survey; some of these will have a greater impact and require more attention than others.

Structural problems include cracks in walls, floors, or foundations, structural movement or instability, or issues with load-bearing walls or supports.
Dampness and water damage including leaks in the roof or the plumbing, water stains, mould or mildew.
Electrical issues such as outdated or unsafe electrical wiring, inadequate electrical capacity or faulty outlets.
Plumbing problems like leaking pipes or fixtures, poor water pressure or drainage, or sewer line issues or backups.
Pest infestations including evidence of active rodents, insects or other pests, or damage caused by these pests to wood, insulation, or other materials
Safety concerns such as the presence of hazardous materials like asbestos, lead paint or mould, a lack of proper fire safety measures, or unsafe balconies or railings.
Poor insulation or energy efficiency, such as draughts or air leaks, inefficient heating systems or inadequate insulation.
Environmental factors like proximity to environmental hazards such as flood zones, landfills, industrial sites, soil contamination or unstable ground conditions.
Legal or compliance issues including property line disputes or encroachments, unpermitted additions or conversions, or property easements.
General wear and tear like signs of neglect, deferred maintenance or ageing infrastructure.

How to deal with a bad house survey

For the seller

Upon receiving the survey report, sellers should thoroughly review the findings and clarify any points of confusion. When the seller has fully understood the report and its implications, they should begin assessing each issue’s severity and creating a list of priorities, i.e. structural problems and water damage should take priority over general wear and tear issues.

Sometimes the seller may come to an agreement, through their solicitors, to leave certain pain points to the buyer. This typically means the buyer can negotiate a lower price on the property, as they will have the cost and hassle of undertaking certain repair work when they take ownership. It’s important the seller bear this in mind before deciding to give the option to the buyer, as it may mean a greater financial loss.

For any work that the seller arranges professionals to do in response to the survey’s findings, they should provide documentation. This helps reassure buyers and provides evidence of the property’s improved condition.

For the buyer

Like the sellers, buyers should carefully review the survey findings and clarify any areas of concern, before assessing the potential impact of the issues on their decision to proceed with the purchase. They should consider the cost of repairs, the property’s value post-repair and any associated risks.

Armed with the survey findings, buyers can negotiate with sellers to address the property issues. This may be in the form of requesting repairs be completed before the sale closes or negotiating a reduction in the purchase price to account for the cost of future repairs. Buyers should seek advice from qualified professionals (contractors or structural engineers) to assess the extent of the issues and provide estimates of repair costs.

Buyers should remain flexible during negotiations and be willing to compromise to reach a mutually satisfactory agreement with the seller. In some cases, splitting repair costs or adjusting timelines may help facilitate a successful transaction.

What is a zero house valuation?

A zero house valuation, also known as a cash value valuation, occurs when the surveyor concludes that the property isn’t mortgageable and it will only appeal to cash buyers. It does not mean the property has no value. The ‘zero’ relates to what someone is willing to lend, not to what someone is willing to pay.

If you are given a zero house valuation, you will only be able to sell your home to people who don’t need a mortgage, i.e. cash buyers. You can ask the surveyor to review their nil valuation; in most cases, you would need to provide some proof of work being carried out to improve the house, such as a bill from a building company.

What is a down valuation?

A down valuation occurs when the mortgage lender’s surveyor values the property below the agreed selling price. This can cause trouble as there is now a gap between the price the buyer and seller have agreed upon, and the amount available to the buyer. This can be troublesome as the buyer may have to rethink their offer or pull out completely.

There are options if you get downvalued, such as lowering the asking price, spending money to validate the existing asking price or finding a new buyer with a different lender (or one who doesn’t need a lender).

How can House Buyer Bureau help?

While a zero house valuation, or a down valuation, can narrow the buyer pool, there are still options in selling your home and not collapsing the chain. In 2023, cash buyers were responsible for almost a third of all property sales. We at House Buyer Bureau are cash buyers and we specialise in buying properties quickly – in as little as 7 days.

Chris

Chris has worked in property all his career, first as a successful estate agent before spotting a gap in the market for buying property directly from people looking for a simple, quick sale.

He has a passion for property and as an experienced valuer, has looked at well over 50,000 properties so far at HBB. He has extensive experience in property buying and regularly comments in the press on property matters, trends and promotes ways to simplify and speed up the selling process.

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