What to Do: Vendor Refuses to Lower Price After Survey
- If a vendor refuses to lower the price after survey findings, prepare yourself with evidence, involve a conveyancer, and prepare to walk away if an agreement can't be reached.
- Discovering unexpected issues in a survey can impact your purchase. From damp to structural problems, these defects can reduce the property's value and lead to costly repairs.
- Moving forward after a negotiation breakdown requires careful consideration. A successful renegotiation can relieve stress, help with financial savings, and provide peace of mind.
Has your house survey come back with unexpected problems? The excitement of finding and completing your property purchase can quickly turn to disappointment when you run into unforeseen costs or issues.
Even worse is when the seller refuses to budge on the house price, but don't let this derail your homeownership journey. You're facing a common yet frustrating situation.
If the seller is unwilling to negotiate, you're faced with a few options
Ultimately, the best course of action depends on the severity of the problems, your financial situation, and your desire to own the property.
- 1 - Accept the original offer: This means proceeding with the purchase as is, taking on the responsibility for any necessary repairs.
- 2 - Renegotiate the price: You can propose a revised offer to the seller's estate agent that reflects the cost of the issues identified in the survey.
- 3 - Withdraw your offer: If the seller remains inflexible and the issues are substantial, you may decide to end your interest in the property.
What is the average price reduction after a survey?
A reduction of 5-10% of the original offer price is often used as a starting point for negotiations.
However, this is just a general guideline. The actual reduction should be based on an assessment of the survey findings, potential repair costs, and the property's overall value.
For example, if the surveyor has said the property is suffering from damp which reduces their valuation by £10,000, bring a contractor to another viewing, and ask to reduce the price by the amount they estimate the work will cost, plus a 10% buffer for unexpected costs. You may also wish to start negotiations with some compensation for the inconvenience:
Estimate of costs: £12,000 over two months. 10% buffer: £1,200 = £13,200.
Ask for a reduction of £14,000 from the originally agreed price, the extras are reasonable, but if the vendor refuses, you then have some wiggle room to come down to costs of only £12,000.
Our panel of solicitors will work quickly and effectively to reflect your renegotiations in the contracts and legal documents to ensure no delay in communication with the seller.
They can also help you if you pull out of your first potential purchase and put an offer in for another property. Our no-sale no-fee policy means you're protected in the event of broken-down negotiations the first time around.
Understanding your house survey report
Receiving your survey results can feel like a rollercoaster of emotions and can seem like a setback. While you were hoping for a clean bill of health for the property, the reality is often different.
Common survey findings
From the mundane to the alarming, survey reports can highlight a range of issues. Some common findings include:
- Structural concerns: Problems with foundations, walls, or roofs can be costly to repair and time-consuming to address. Prospective buyers will either want this fixed before completion or a dramatic reduction in the listed price due to delays and expenses to sort it out.
- Damp and mould: These issues can cause health problems and damage to the property, not to mention unsightly to look at. No new homeowner wants to deal with damp and mould after moving in.
- Electrical and plumbing problems: Outdated or faulty systems can be dangerous and expensive to replace, even posing safety risks. A buyer will want to be certain of the property's safety before officially completing the purchase.
- Heating and insulation: Inefficient systems can increase energy bills and discomfort. Buyers will want these systems working perfectly before moving in.
Major structural issues or widespread damp can significantly reduce the price. However, smaller problems might be more easily addressed and have a less severe impact.
As a buyer, it's essential to weigh up the cost of repairs against the potential increase in value once the work is complete.
Why sellers might refuse to lower the house price
It can be frustrating when a seller refuses to negotiate on the price, especially after receiving a survey highlighting issues.
Understanding the seller's perspective can help you approach the situation with empathy and potentially find common ground. There are several reasons why a seller might take this stance:
- Overly optimistic valuation: Some sellers might have overestimated their property's value, leading to unrealistic expectations.
- Financial constraints: The seller might rely on the sale proceeds to purchase another property in a chain or meet financial obligations.
- Emotional attachment: Sellers often have an emotional connection to their home, making it difficult to accept a lower offer.
- Market conditions: A strong seller's market can give sellers more leverage, making them less inclined to negotiate.
- Ignorance of the issues: The seller might be unaware of the severity of the problems highlighted in the survey.
How to negotiate house price template
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Your options as a buyer
Don't be disheartened if the seller refuses to drop their price, remain calm and consider your options. Be prepared to compromise, but don't be afraid to walk away if the deal isn't right for you.
Negotiate again with the seller
Gather your evidence. Gather estimated repair costs from multiple contractors to prove how much you'd be out of pocket if you buy. This breakdown of materials, labour, and expected duration of the work might change the seller's mind, and at the very least will put you in a better place for the renegotiation. Remember, your inconvenience is a strong negotiation point. On top of the financial cost, you'll have to live on a building site while the issues are resolved.
Make a strong case. Clearly explain how the issues affect the property's value and your willingness to proceed with the purchase at a reduced price.
Be prepared to compromise. Consider a formal counteroffer that reflects the cost of repairs or suggests a price reduction.
Present alternatives. Show the vendor that you're considering other properties that cost less or the same without the problems you're facing with this property. Use our house offer calculator to get an average price per sqm for similar properties to support your surveyor's valuation.
Look for a win-win. If the vendor is firm on price and you can afford to proceed, negotiate on other terms, such as your ideal completion date or fixtures and fittings. For example, you could offset the cost of repairs in savings on new furniture and appliances, if they're willing to include them in the sale.
Involve your conveyancer
Seek professional advice. Your conveyancer can guide you through the negotiation process and give expert advice to protect your interests. They will have experience in broken-down negotiations and price disputes.
Contractual considerations. They can review the contract and identify any issues or clauses that might help your case. However, be prepared for delays and potentially more legal costs through this option.
Obtain another valuation
Assess the property's worth. Another survey and valuation can provide an independent estimate of the property's value based on its current condition. It can take around 1-2 weeks to arrange and receive a valuation report.
Strengthen your position. A valuation can support your argument for a price reduction. The seller won't be able to hide behind their asking price for long if an independent party evaluates the property.
The surveyor's professional accreditation will help you here; all of our surveyors are RICS accredited which means they can be relied upon for an accurate and independent opinion. It'll help all but the most unreasonable vendors accept a well-justified valuation.
Consider pulling out of the deal
Be prepared to walk away. If the seller is unwilling to negotiate, you may need to consider other options and one of them might be to walk away from the purchase completely. The seller might agree to a compromise if threatened with this, but be careful as there's no going back after letting them know you'll pull out.
Remember, negotiating can be stressful, but staying calm and assertive is essential. Be prepared to compromise, but don't be afraid to walk away if the deal isn't right for you.
The negotiation process in a nutshell
Once an agreement is reached, the conveyancing process typically takes 8-12 weeks to complete. However, this timeframe can vary depending on property complexity and the efficiency of the conveyancing solicitors involved.
- 1 - Gather your evidence: Collect all relevant documentation, including the survey report, valuation (if obtained), and any repair quotes. Clearly outline the issues and their potential impact on the property.
- 2 - Initiate negotiations: Contact the seller or their estate agent to discuss the survey findings and your concerns. Be prepared to back up your claims with the collected evidence. This can typically take a few weeks as long as both parties are cooperative, but if the negotiation is more complex or involves disputes, it could take several months.
- 3 - Make a counteroffer: Present a revised offer that reflects the reduced value of the property. Be prepared to negotiate and find a compromise.
- 4 - Seek legal advice (if necessary): If negotiations break down, consult with a conveyancing solicitor to explore your legal options.
- 5 - Exchange contracts: Once an agreement is reached, proceed with the exchange of contracts.
- 6 - Completion: Complete the property purchase as per the agreed terms.
Risks and rewards
Risks of a renegotiation
- Financial loss: Ignoring or underestimating the issues raised in the survey could lead to unexpected and costly repairs in the future.
- Time and money wasted: If you pull out after a failed negotiation, you might be frustrated with the time and money spent trying to purchase the property.
- Delayed move-in: Waiting for repair work might delay your move-in date, causing you and the seller inconveniences, potentially holding up the chain and incurring additional costs.
- Damaged relationship: Aggressive or unreasonable negotiation tactics can damage your relationship with the seller, potentially delaying the process or stopping it altogether.
- Loss of interest: If the negotiation process becomes too drawn out, you might lose interest in the property altogether.
Rewards of successful renegotiation
- Financial savings: A successful negotiation can result in significant savings from the original asking price.
- Peace of mind: Addressing the issues upfront can reassure and reduce stress.
- Improved property value: Once any necessary repairs are completed, the property's value can increase and as the homeowner, you'll see the benefits.
- Negotiation skills: Going through a renegotiation process allows you to improve your skills for any future property purchases or other negotiations.
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