Survey Problems When Selling a House: What If the Buyer Pulls Out?

Survey problems can cause property sales to collapse. Find out what your options are if a buyer pulls out and whether auction could offer a better route.

Irfanali Shivji

8/31/20265 min read

You agree a sale. The buyer seems serious, solicitors are instructed and everything appears to be moving forward.

Then the survey happens.

A problem is raised with the roof, damp, movement, electrics, construction or the general condition of the property. Suddenly the buyer becomes nervous. They want a substantial reduction, they cannot get the mortgage they expected, or they pull out altogether.

If this has happened to you, the important question is not always how to find another buyer.

It may be whether you are selling to the right type of buyer in the first place.

Why surveys can cause property sales to fall apart

A survey is designed to identify issues with a property, so the fact that something has been raised does not necessarily mean your property cannot be sold.

The problem is often what happens next.

A buyer may have offered based on what they could see during a viewing. They may not have properly budgeted for repairs or understood the extent of the work involved.

Their mortgage lender may also take a different view once a valuation or survey has been carried out.

Issues can include:

structural movement
significant damp
roof defects
outdated electrics or plumbing
non-standard construction
major refurbishment requirements
problems affecting mortgageability

The buyer who originally saw potential may suddenly realise that the property involves more work, cost or risk than they expected.

That can lead to renegotiation or the sale collapsing completely.

What happens if your buyer pulls out after the survey?

In a normal private treaty sale, a buyer can usually withdraw before exchange of contracts.

That means you could have spent weeks progressing the transaction before finding yourself back at the beginning.

You then have to decide whether to:

put the property back on the market
reduce the asking price
carry out the work yourself
find another buyer and hope they take a different view

The difficulty is that if the next buyer obtains a similar survey, you may end up facing the same conversation again.

This is where repeatedly changing buyers does not necessarily solve the underlying problem.

Should you fix the problems before selling?

Sometimes, yes.

If relatively straightforward work would make the property easier to sell and improve the likely outcome, completing the repairs first could make sense.

But that is not always practical.

The work may be expensive. You may not have the appetite to manage a refurbishment. The property may be inherited, tenanted or already causing you enough stress.

There is also no guarantee that spending money on improvements will produce the return you expect.

Before committing to major works, it is worth considering another question:

Would an experienced buyer be prepared to purchase the property in its current condition?

For some properties, the answer is yes.

Your property may need a different buyer, not another viewing

A property that needs significant work can be difficult for a normal homeowner.

They may be relying on a mainstream mortgage, have a limited renovation budget or simply want somewhere they can move into without taking on a major project.

An investor, developer or experienced property buyer may look at exactly the same property differently.

They are more likely to assess:

what the work will cost
what the property could be worth afterwards
whether specialist finance is available
the potential rental return
whether there is a development opportunity
the level of risk involved

The defects have not disappeared.

The difference is that the buyer understands them before committing.

Could auction be a better route?

Auction can be worth considering where the condition of the property is repeatedly causing problems with conventional buyers.

It can help put the property in front of buyers who actively look for refurbishment projects, investment opportunities and properties that require specialist knowledge or finance.

More importantly, the property can be marketed openly for what it is.

Rather than trying to make a difficult property appear straightforward, known issues can be dealt with more transparently.

Buyers can review the available information and carry out their own due diligence before deciding whether to proceed.

That can reduce the chances of somebody offering enthusiastically at the beginning and only discovering later that the property is not suitable for them.

Does auction mean accepting a very low price?

Not necessarily.

There is an understandable perception that putting a property into auction means accepting whatever somebody is prepared to pay.

That is not how a properly considered auction strategy should work.

The property still needs to be valued sensibly and the pricing strategy needs to reflect its condition, likely buyer audience and the local market.

A reserve price can also be agreed, protecting the minimum level at which the property can be sold.

The aim is not simply to sell cheaply.

It is to find the point where the property represents a genuine opportunity to the right buyer while still producing an acceptable result for you.

What if a previous survey already identified the problems?

That information can actually be useful.

If you already know that previous buyers or lenders have raised concerns, those issues can be considered before the property is remarketed.

For example, you may already know that there is:

evidence of movement
a roof requiring substantial work
damp that needs investigation
a construction type that some lenders will not accept
significant modernisation required

Trying to ignore those issues is unlikely to help.

The next serious buyer will probably discover them anyway.

A better approach is to understand the problem, consider how it affects value and decide which type of buyer is realistically equipped to deal with it.

What if the property cannot get a normal mortgage?

This is slightly different from a buyer simply being worried about the survey.

Sometimes the condition or construction of a property means mainstream lenders will not lend against it at all.

That significantly reduces the normal buyer pool.

But it does not necessarily mean the property is unsellable.

Cash buyers, developers and buyers using specialist finance may still be interested.

The important part is making sure the property is marketed to people who understand those circumstances from the outset.

Before putting the property back on the market

If you have already had a sale collapse after a survey, I would be cautious about simply putting the property back online and hoping the next buyer reacts differently.

First establish what actually caused the sale to fail.

Was it the buyer?

Was it their mortgage lender?

Was the repair cost greater than they expected?

Is there a genuine structural problem?

Or is the property simply better suited to an investor or developer than an owner-occupier?

Once you understand that, you can make a much better decision about how to sell it.

A failed sale does not mean an unsellable property

Some properties simply do not fit comfortably into the mainstream residential market.

That does not automatically make them bad properties.

They may require work, specialist finance or a buyer with more experience.

If a survey has already caused one sale to collapse, the answer may not be another round of viewings with the same type of buyer.

It may be time to position the property differently and put it in front of people who understand what they are buying.

If you have a property where survey issues, condition or mortgage problems are making the sale difficult, I can review the situation with you and explain whether auction could be a sensible route.