Two homebuyer reports delivering vastly different findings cause confusion

It had all been going so well. Mortgage offer? Check. Conveyancing inquiries complete? Check. Agreed moving date? Check. We were three weeks away from moving into our first family home, a prettily refurbished three-bedroom Victorian end-of-terrace in Tunbridge Wells, when it happened: the survey from hell.

Admittedly, we had instructed the surveyor late on in the buying process. This was because our vendor had a survey done a year ago that had raised only one issue, which she had already told us about. In 12 months, surely there couldn’t be any more serious problems? This, it turned out, was a very unfortunate assumption.

Our survey uncovered 11 “defects that are serious and/or need to be repaired, replaced or investigated urgently”. For those unfamiliar with homebuyer reports, defects are flagged up by a numbered “traffic light” system and ours had an alarming three red number three blobs, along with six number two ambers and only two number one greens.

This was our first experience of a homebuyer report, as it would be for many people, given that they have only been around since 2009, and only fully replacing the previous homebuyer survey and valuation reports in March last year. Was such a damning appraisal normal? Sure, 11 major defects sounds bad, but perhaps it is not so bad if that is what everyone gets?

The surveyor had left no margin for doubt, however: “I do not consider this property to be a very good prospect for purchase,” he said. With such an unequivocal statement, it is difficult to argue that he was just being over-cautious to cover his back. And the issues he cited sounded bad.

Among the most serious were: a chimney stack on the roof left unsupported after a chimney breast was removed during the recent “refurbishment” works (the surveyor’s inverted commas). The roof covering needed replacing. Pipes, gutters, bargeboards, soffits and fascias all needed replacing. The incoming water main was “likely to be hidden lead”, which is dangerous. Plaster was coming loose and doubts were raised about whether our vendor’s recent alterations met building regulations. In the worst-case scenario, the unofficial estimate for the repair bill was £20,000. Too much money for us to gamble on the chance that he might just have been feeling unforgiving that day.

And with me five-and-a-half months pregnant, would we want to live in an unsafe house or a building site? We sent the report to our vendor. To rescue the sale, she offered to pay her builder to do any necessary repair work.

He, however, argued that the refurbishment works were fine and that the survey was exaggerated. At this point, we backed out. We are now in the process of buying somewhere else (with a more expensive structural survey).

But our experience of conflicting surveys left us confused. Who was right? Her surveyor or ours? How seriously should buyers take the findings of surveyors, who often have their professional indemnity insurance in the backs of their minds? Shouldn’t we all just have full structural surveys done if homebuyer reports can leave so much open to interpretation?

As a rule, homebuyer reports are best suited to properties less than 100 years old that have not been, or will not not be, extensively altered. The average cost for a homebuyer report is £325, excluding VAT.

The arguments in favour of having one are strong. As well as flagging up any need for repair work, they offer a valuation of the property and can be a useful negotiating tool. Nevertheless, a quarter of buyers do not bother with one, relying instead on their lender’s mortgage-valuation report in the belief that this covers the building’s condition, according to the Royal Institution of Chartered Surveyors (RICS). But valuation reports are “simply a confirmation to your lender that it will get its money back on your property if you can’t pay. It isn’t a survey and won’t tell you if there are any potential problems with the building,” Rosemary Rogers.

RICS estimates that purchasers who do not have surveys spend an average of £1,818 on unplanned building work after they have moved in.

Nevertheless, homebuyer reports are not infallible. “The homebuyer report focuses on matters that, in the surveyor’s opinion, may affect the value of the property if they are not dealt with. It is based on the surveyor’s opinion and opinions can differ,” Rogers says.

RICS added that, in our case: “It is conceivable that two inspections carried out at different periods and after works had been undertaken could arrive at different conclusions, particularly if there were different impediments to the inspection, for example, access.”

Buyers can opt for a building survey from a RICS surveyor instead. These are more expensive, at an average of £431 and don’t include a valuation unless you request one.

They are recommended for buildings older than about 100 years or those that have been extensively altered or are dilapidated. They can be personalised and are more expensive because the survey is more in-depth than a homebuyer report. There are other types of survey around, too, such as the recently introduced home condition report, also carried out by RICS surveyors and considered less thorough by some than the homebuyer report. This is not to be confused with the home condition survey, which is similar to, but not as thorough as, a full structural survey and is regulated by bodies other than RICS, such as the Surveyors and Valuers Accreditation, which has its own complaints procedures. Unlike home condition reports, home condition surveys are not listed on a central register. Neither offers a valuation.

Rogers says that the introduction of new types of surveys “is causing confusion among consumers and some consternation within the surveying community. The home condition report is briefer than the homebuyers report with no advice. It offers only a ‘head and shoulders’ look into the loft.” RICS says it receives only a “small number” of complaints about homebuyer reports each year. Redress is limited, although financial awards are available to a maximum of £25,000. Confused? You may be, but better that than unaware. We’ll never know whether the faults our surveyor identified were as bad as he said and it was galling to lose around £1,000 on lender and conveyancer fees before we pulled out. Nevertheless, we are grateful that we won’t lose any more — not on that house, at least.

YOUR RIGHTS

If you are a vendor and your sale falls through because your buyer received a negative report from the surveyor, you cannot complain to that surveyor as you didn’t pay for the service. But if the faults that put off your buyer were evident at the time of your original survey, you could complain to your surveyor instead.

If you are a buyer and believe that your surveyor was negligent, complain to the surveyor in the first instance. He or she then has eight weeks to reach a resolution with you.

If no resolution is agreed, the buyer must contact the independent redress scheme named on the complaints handling procedure, possibly the RICS accredited Ombudsman Services: Property (ombudsman-services.org/property.html).

If a buyer suspects that a surveyor or firm has failed to follow guidance, he or she is advised to ask RICS Regulation to investigate.

Know your reports from your surveys

• Mortgage lender’s valuation report — part of your mortgage valuation it should not be relied upon for a view on the condition of the property. Costs vary and are dependent on the size of the property, but expect to pay about £400.

• Homebuyer report — the most universal survey, suitable for properties that have not been drastically altered and are less than 100 years old. They are based on a “traffic light” fault-reporting system and contain a valuation of the property that can be useful for negotiating the price down. Carried out by RICS surveyors, the average cost is £325, excluding VAT at 20 per cent.

If you are looking to purchase a property for Investment purposes a full structural survey is recommended. After all, you will either be developing the home to re-sell or placing tenants in the property. Either way, you're better to be safe than sorry!

Prospect Investors Club works very closely with a RICS surveyor and are able to arrange a quotation with 24 hours and produce a full survey report within 5 working days of instruction. The prices are very competitive so why not speak with an expert today?

Contact Prospect Surveyors and Valuers on 0118 955 9712.

Source- Thetimes.co.uk