After a property survey has uncovered issues, you can use the results to renegotiate the house price to cover the cost of repairs. As your offer is still Subject to Contract (STC), you’re not the legal owner of the property and it’s still possible for the contract to be altered.
The thought of negotiating the house price after your offer is accepted can sometimes be daunting, but any buyer is eligible to do so if they uncover serious issues with the property. From hiring another chartered surveyor to speaking with your mortgage lender, this guide will take you through the process of how to negotiate a house price down after a survey.
If you’ve received the survey results and are concerned by the defects uncovered, you may begin to re-think the purchase. Whether there was a red condition rating in your homebuyers survey or serious structural problems highlighted in the building survey, you might be thinking, “What do I do now?”.
It should be noted that some problems can be easily fixed. To cover themselves, many surveyors highlight common and obvious issues that shouldn’t need much work. Don’t be scared off by these as they’re to be expected. Only major issues should require renegotiation with the seller. If there are no defects that require a lot of time and money to solve or if the report was overall positive, it’s not recommended to negotiate a house price down as the seller may immediately reject the deal.
Your first line of action should be to speak to the surveyor who conducted the inspection. They should be happy to take you through the issues step by step so that you’re fully aware of the repairs needed and their overall costs. It would be wise to get a second opinion from another RICS certified surveyor to compare results and ensure their accuracy.
If you’re still unhappy with the results and the survey issues raised, it’s time to consider your options. There are a few ways to handle the situation.
Research the Repair Costs
Before making a final decision, it would be wise to calculate the repair costs. Find different quotes from a variety of builders, electricians, anyone who can work with you on the defects. You can then produce your calculations to the seller who might even suggest making the necessary renovations themselves. However, the cost could then be added to the overall price of the property or, ideally, they could just put it down to ‘good-will’.
Accept the Offer
If the issues uncovered are minor, the seller may not want to negotiate the price at all. Most old properties will have small issues that need repairing, it can be impossible to dodge. If the results don’t uncover major problems, you may want to calculate how much it would cost to repair them yourself. If the property is already being offered at a reasonable price you can continue with the purchase as planned.
Pulling Out of a House Sale
If you’re not legally bound to the property and your offer is still Subject to Contract (STC) you’re legally within your rights to walk away from the transaction and pull out of the sale. If the work required is too costly or too daunting for you to proceed, you don’t have to continue with the purchase. You’ll need to contact your solicitor or conveyancer who will then inform you of the necessary steps to take.
It’s possible to pull out of a house sale before exchanging contracts as no legal documents have been signed. You will lose money for the work already carried out, like the conveyancing searches or surveys, as you don’t get reimbursed for these costs. You'll still be expected to pay for any other conveyancing work that has been carried out but then the process stops there.
However, once the buyer and seller have exchanged contracts, the buyer is legally bound to the property. Pulling out of a house sale after exchanging contracts will result in a large fine and hefty penalties as you’ll be breaking a legally binding contract. The seller will also be expected to keep your deposit, meaning you’ll be losing thousands of pounds on top of the fine and other costs.
Negotiate the House Price Down
Negative survey results can affect the value of the property so the buyer can legally ask for a renegotiation of the price to reduce it by the repair costs to reflect its current condition. Even if an offer has been accepted, no contracts have been signed and so the buyer isn’t the legal owner of the property yet. It’s still possible to make changes to the contract as they haven’t been signed.
To negotiate a house price down after a survey, many people prefer to speak directly to the seller. This can be easier but not always possible. Once you’ve spoken to the surveyor and have determined that the issues raised are major, the next step would be to contact your estate agent to provide them with the report. You want to ensure there’s still a good relationship between you and the seller and they can help with this. They’ll speak to the seller and pass on your concerns beginning the renegotiation process and giving you advice on how to continue.
You should also communicate with your conveyancer. Like your estate agent, they should provide you with expert advice on how to move forward. Conveyancers can help you with any legal advice and suggest whether it’s possible to successfully renegotiate a price.
Now we get to the main body of the negotiation work! An important way to continue is to do your research. You need to identify the current market value of the property and compare it to the condition of the house based on the survey results. Only major issues will encourage a renegotiation as minor issues will be found in most properties and are easily fixed.
Calculating the cost of renovating the property until it’s in ‘good condition’ can help your case when speaking to the seller. It would be wise to include the results of the second surveyor to support your findings. Once you have a relevant and thorough report, you can email your estate agent and conveyancer to begin.
The seller may ask for follow-up reports so that they can conduct their own inspection and make their own estimations. To lower the risk of re-marketing, it's recommended to wait for this to be completed. Be prepared to haggle and be realistic with the price you’re willing to accept. Don’t be afraid to walk away if the price and condition of the property aren’t up to your standards. There’s a chance the seller may offer to complete the repairs themselves to keep the initial price up, but you must consider how reliable of a job they can provide. If you’re happy to, you may accept the deal or insist on renegotiating.
There’s no way to determine how long the negotiation of the house price will take or if it’ll be successful. Depending on the seller and how soon they need the property sold, the negotiation could be dealt with instantly or one of the parties may even decide to terminate the deal.
However, we understand how daunting the process can be and so we’ve provided you with a list of useful tips for negotiating a house price down after a survey:
If the renegotiation is successful and you’re purchasing the property with the aid of a mortgage, you’ll need to contact your mortgage lender. You can also contact them during the renegotiating of the house price to prepare earlier, but if it’s successful then it’s vital to contact them immediately as it may affect your mortgage offer. The application will have to be altered and updated based on the property’s new value.
If you neglect to contact your mortgage lender, you‘ll be borrowing the same amount as initially agreed upon even though the property costs less. The amount of time it takes to change the contract is up to the lender. Some may finish the same day it’s discussed, others may take up to a week. However, the process should be straight-forward as it’s simply updating the application with no new forms or tests to be completed.
We hope this guide has helped you successfully prepare for negotiating a house price down after receiving a survey. Renegotiating is a common process for many who have received bad surveying results and you shouldn’t be put off from proceeding.
If you would like to continue by finding another surveyor for a second opinion, then fill out our quick and simple form to get your free surveying quote from professional, dependable surveyors in your area.