I need to sell my home and I am worried I won’t find a buyer because we have had subsidence. We have had it treated, but what are the hurdles I'll need to jump in order to convince buyers all is fine and get a sale?
Just the mention of subsidence can send a shiver down the spine of homebuyers. But it doesn’t mean a house will fall down. Rather, it refers to the fact that the ground the property is built on has sunk, causing the foundations to drop.
As I’m sure you know, the result can be diagonal cracks that are usually wider at the top than the bottom and located close to windows and doors. Other signs of subsidence include doors and windows that can be difficult to open and close.
Readers wanting to know more about it can read the HomeOwners Alliance 'Guide to subsidence: what is it, how to spot the signs and what to do' for more details.
You’ve done the right thing by spotting the problem and having it treated. Too many homeowners put their head in the sand. If you had left the subsidence untreated, the only option for selling your home would be to a cash buyer, such as a property developer.
Because you’ve had it remedied, you should be able to sell on the open market. It would be wise to take advice from a conveyancing solicitor early on to go through any potential legal problems. This will avoid delays when you come to find a buyer and maximise your chances of a successful sale.
Don’t be tempted not to tell prospective buyers about the subsidence. Consumer protection regulations dictate that a seller must disclose any pertinent information they have about the property, which might influence the prospective buyer’s decision. Failure to do so can result in a claim of misrepresentation against your estate agent.
You can reassure potential buyers that the problem has been resolved, with documentation showing the cause and subsequent treatment taken.
Speak to your estate agent who should be able to raise the issue with buyers at the right time and talk through remediation works in a way that hopefully allays any fears.
If your home has been underpinned, you will be able to show vendors the completion certificate your received from your local council. For any other repairs, if these were completed by your insurer, you should have a Certificate of Structural Adequacy.
Your buyer should get their own survey, and their surveyor will likely note that the subsidence was historic but may suggest the buyer gets a further specialist investigation carried out.
One issue that prospective buyers may have is with insurance. Buildings insurance is key to the prospective buyer being able to get a mortgage – if you cannot get insurance, you cannot get a mortgage.
Once you have a buyer, your conveyancing solicitor will ask you to complete a seller’s information form (TA6) on which you will have to note any claims you have made on your buildings insurance.
You will also need to declare on the TA6 if you have high amounts of excess on your insurance or the premiums are abnormally high. If you do not, you could be liable at a later stage for misinformation.
Your prospective buyer may find that their options for getting insurance on your property are more limited and premiums cost more than they would typically. This all depends on how long ago the subsidence occurred and if it has returned.
I’d recommend giving your buyer your insurer’s details – so they can take out insurance with them.
It’s also worth noting that the buyer’s mortgage lender may instruct its own valuation and if historic subsidence is detected they might need a more detailed, specialist report.
The lending decision will hinge on the outcome of that valuation and whether it recommends the property as suitable security for the mortgage.
Your buyer may want to take out indemnity cover – it provides protection for them, the lender and successors.
They may also try to negotiate a drop in price to cover the extra cost of insurance they will incur over the years.
Paula Higgins is chief executive of the HomeOwners Alliance.