selling after subsidence

cannyshopper_2

I know there are similar threads on this topic, but each has subtle differences that might make a difference to the outcome. So here's another one...

I want to sell a house I've owned for 25 years.

About 15 years ago I noticed some major cracks in the side wall of a single story extension. The house is built on clay, and the problems became apparent after a couple of particularly dry summers.

It was monitored for 2 years & the surveyor recommended that the extension was "stitched" back to the main building and some steel rods were inserted horizontally between some of the brickwork. I also had a couple of trees & some shrubs removed from the garden.
There have been absolutely no problems since, not even minor settlement cracking.

I have had problems getting buildings insurance ever since - the original company still covers it, but no-one else wants to know.

I was rather naive at the time & I have since realised that the surveyor had exaggerated the extent of the problem probably to get more money out of the insurance company. The total claim came to about £20K, of which a lot was replastering & redecoration of other rooms, which was totally unnecessary.

The house is going to be marketed as suitable for a modernisation/renovation project. It's quite possible that a new buyer would demolish the extension, which has a flat roof & does not make the best use of the layout of the rest of the house & the space available.

I have very little paperwork detailing the problem, and nothing in writing stating what work has been done. I can't even find the final surveyor's report (from 1998).

My questions then - is it worth getting a fresh surveyor's report done before putting the house up for sale, or is a prospective buyer likely to ignore it and run a mile?

Does this sort of history have much impact on the value of the house & its viability for a mortgage offer?

All opinions welcome!

Thank you.

cannyshopper_2

no comments anyone?

lionheartedgirl

I was interested to read any replies too, I'm in a similar situation but have details regarding the original problem and the work that was carried out to repair it.

Mine wasn't even proper subsidence, but was down to an incorrectly supported lintel, and similar to you, 20 years ago but still affecting things on the insurance quote thing now.

I bought the house 7 years ago. We had no problem getting a mortgage on it, and the sellers made it clear to us what had been done. We checked we could take over the existing building insurance and when it was confirmed we could, we decided to go ahead.

Hopefully no problems this time round.

FireWyrm

From a prospective buyers point of view, I like to think I'm fairly open minded. If I came to your house and you mentioned the cracks, I might be inclined to have a surveyor take a look. However, I, like most people do not have lots of spare cash and I would probably go looking for a house that suited me more and came with less baggage.

I'm sorry, but the word 'subsidence' would make most ordinary buyers run a mile and makes the building completely uninsurable. From a logistical point of view, as a buyer, I need to have building insurance on the property from the day of exchange as I am legally obliged to buy it once contracts are exchanged, even if it is a smoking ruin. If you cannot secure building insurance, neither can your buyer, it's not mortgageable and nothing short of a cash buyer with huge amounts of money, experience, connections and balls is going to be interested in buying it.

Ordinary people will run.

lionheartedgirl

as mentioned above though, I have buildings insurance no problem.

Subsidence doesn't necessarily make a house uninsurable at all. Most online brokers can cope with it now as well - they ask you a lot of detailed questions and while it may not be as cheap as a house with no known subsidence, it doesn't mean you can't get insurance.

FireWyrm

lionheartedgirl wrote: »

as mentioned above though, I have buildings insurance no problem.

Subsidence doesn't necessarily make a house uninsurable at all. Most online brokers can cope with it now as well - they ask you a lot of detailed questions and while it may not be as cheap as a house with no known subsidence, it doesn't mean you can't get insurance.

Perhaps you managed to arrange insurance, that's good. However as a buyer, to get to the point where I even need to think about insurance, I will have gone through a mortgage application (including a survey) will will probably show adverse conditions due to subsidence. Assuming I'm not totally p**ed off with you because I've spent money on that, I *might* get a more detailed survey done because I didnt trust your assurances that it was "all ok". After that, I will be absolutely freaking incandescent when I have spent £1000+ on surveys to find that a) I cant mortgage it, or if I did, I might be stuck with a property I couldnt sell either and b) I will have to spend years of my life pressing different numbers and waiting to speak to an advisor just to insure the place. When I find that lot out...I'll run. I guarantee you.

lionheartedgirl

wooaahhh....

as explained, it was pointed out to us before we'd offered, and we went through the insurers notes we were shown with a fine tooth comb.

before we offered we rang the insurers to make enquiries to check they would continue the cover. they confirmed they would.

we then offered which was accepted. The mortgage valuation had no mention of subsidence and we were offered a mortgage based on this. We then had our own home buyer report done, which didn't pick anything up either because all the damage had been fixed.

We loved the house, but yes when the S word was mentioned we were hesitant.

I'm just offering my experiences, but yes had this come up after we had shelled out for surveys/solicitors/searches, I would have been cross too I will be as honest with my buyers as my sellers were with me.

cannyshopper_2

well fireWyrm, I am glad you took the time to respond, but I don't think you quite read all the details properly. Obviously you are not the type of buyer likely to be interested in this property.

First, the property IS insured, and there is an undertaking in place that this company will continue to insure the building. My current premium might well be almost double what a perfect house in the same area might cost, but its not extortionate.
It is currently insured by one of the top names. It may well be possible to arrange insurance from another company, I don't know, all I know is that most of the big names don't want to offer cover... understandably, they are selling to a mass market & will use any excuse they can to decline anything non-standard.

Secondly, I did say that the property is a likely renovation/modernisation project, and that is a totally different market from a young family wanting something ready to move into with no extra costs.

Thirdly, I am pretty sure the original problem was due to the quality of the extension, compounded by being built on clay. If the new purchaser decides to demolish it, then there is no longer any reason to suspect there would be any future problems, no?

Fourth, the problem was remedied 14 years ago & there is no sign of it recurring. Surely that ought to count for something?

I am well aware that this needs to be disclosed to a prospective purchaser, I am just trying to save time & a lot of stress by planning ahead.

myfanwy

I've just sold a flat in a building which had recently been underpinned (resulting in a huge insurance claim). It wasn't a cash sale either, but to an FTB with a mortgage. The buyer knew all about the problem and wasn't fazed. I actually had several offers - all from buyers who were aware of the issue. So don't panic!

A few tips:

- Make sure your estate agent is completely upfront with potential buyers from the outset. Buyers will rightly get extremely hacked off if they only find out about the history of subsidence after they have spent money on surveys etc.
- During the sale process I made sure my solicitor shared every possible piece of documentation with the buyer regarding the repair work - drawings, reports, surveys, builders' guarantees, etc. If you don't have this kind of paperwork, it may make it harder to secure a sale. If you need to get the property sold quickly, it might be worth investing in getting an up-to-date structural engineer's report (not a standard building surveyor, who won't have the same level of expertise) to provide evidence that the movement is no longer current. Your EA can then show it to prospective purchasers.
- It may be worth speaking to your insurance co to get reassurances that the cover will continue with a new owner. Get them in writing or on email so you can pass them on to any buyers needing reassurance.

Obviously you are going to get cautious buyers (especially FTBs) who will run a mile as soon as "subsidence" is mentioned - but if your house is a good property in other respects and is correctly priced, there's no reason why you shouldn't get some interest.

Hope this helps.