Deciding to invest or buy a property is a significant financial decision that carries inherent risks. To mitigate these risks, and to help you make an informed investment choice, a pre-acquisition survey is a great way to do just that. It provides you with valuable insights into the present condition, and identifies how structurally sound the property is. It also helps you see if the property is suitable for your specific needs and highlights any potential financial obligations and liabilities that may arise in the future. These surveys empower you to make an informed assessment of the property’s value.
Not everyone understands why these surveys are needed or even what they are all about, especially if they are experienced property investors or even first-home buyers. So, today, let’s explore pre-acquisition surveys, their purpose and coverage, and the benefits they provide.
What is a pre-acquisition survey?
A pre-acquisition survey, also known as a building survey or a property inspection, is a comprehensive assessment of a residential or commercial property’s condition and its potential risks and defects. This survey is conducted by us, Trinity Rose Chartered Surveyors (RICS) who specialise in evaluating residential and commercial properties and their associated risks. They cover various aspects including structural integrity, roofing, fenestration, finishes, compliance, materials and an overview of services installations.
What’s the objective of pre-acquisition survey?
The survey’s objective, the entire point of this survey, is to point out any defects, potential maintenance issues, structural problems that may require immediate attention, and/or problems that could impact the property’s value and functionality in the long-term (think of these surveys as doing the investigative work for you. They help you plan for future expectations and expenses).
According to RICS, having a pre-acquisition survey can save you up to 20% on the purchase price by negotiating repairs or price reductions based on the survey findings.
So, it’s definitely a smart move to get one, but, when should you get one?
Whenever you are thinking about purchasing a property, before you sign anything, get a pre-acquisition survey done. This is equally true for an individual investor, property developer, residential home buyer, and business owner looking to change their premises. It helps you make a well-informed decision on whether the property is suitable for your needs, ensures you are fully aware of any risks or liabilities that may come your way, and gives you leverage when negotiating. Let us share with you why.
What does a pre-acquisition survey involve?
During a pre-acquisition survey, a Chartered Surveyor conducts a thorough examination of the property, internally and externally. They evaluate the building’s structure, inspect the condition of its components, and then they document any visible defects or signs of potential issues. The surveyor may use specialist equipment, such as thermal imaging cameras to identify hidden problems like insulation deficiencies or moisture ingress.
Other benefits to having one completed is the risk mitigation based on reliable advice. According to RICS, “Pre-acquisition surveys enable potential purchasers to identify and understand the nature of significant building defects that might otherwise be missed, leading to costly surprises post-purchase.” Pre-acquisition surveys can help mitigate this risk by uncovering such issues beforehand.
The survey arms you with findings that contribute to negotiating the purchase price or request the seller to address any identified issues before finalising the deal. This can potentially save you money and provide leverage in the negotiation process.
According to a study conducted by HomeOwners Alliance, 79% of property buyers who had a pre-acquisition survey were able to negotiate a lower purchase price or request repairs based on the survey findings. The same study showed that 41% of buyers who had a pre-acquisition survey were able to renegotiate the purchase price, saving an average of £5,000.
But, one of the most important reasons to get one completed: it provides you with peace of mind. The RICS emphasises, “Knowing the condition of the building in advance helps to alleviate potential problems and provides comfort to the purchaser.”
Propertymark shares the same sentiment. According to their survey, 93% of buyers who had a pre-acquisition survey felt more confident in their purchasing decision and had peace of mind about the property’s condition. The study also found that 87% of buyers considered pre-acquisition surveys to be an essential part of the property buying process.
In any market, conducting a pre-acquisition survey is a wise decision that offers numerous benefits. It provides a comprehensive understanding of the property’s condition enabling you to make an informed investment choice, negotiate favourable terms, and avoid potential pitfalls. By following our expert advice, you can embark on your property acquisition with confidence, ensuring a secure and successful investment.