While it was accepted that there is still some scepticism from a number of buyers, large numbers are beginning to accept the facts presented by the vendor as long as it is clear that the surveys have been carried out by a completely independent and reliable source.
Paul Spaven, Tuffin Ferraby Taylor, explains: “For a seller disposing of a property asset it is essential that they achieve the highest possible price with the minimum delay. In difficult market conditions, asset disposals are often essential to maintain liquidity, preserve banking covenants or raise capital for business initiatives. One of the most time consuming and expensive elements of a transaction comes when a deal is stalled or breaks down following the results of the buyer’s surveys, when inevitable negotiations over price occur. By carrying out surveys of the property before it goes to market, owners are able to begin the process with a realistic value being set based on full knowledge of the asset’s condition.”
Also highlighted by the research was the importance for the reports to be clear, concise, neutral, objective and factual. The consensus was that if a report was worded so that it looked as though it had been written to ‘paper over the cracks’ then it will ruin the integrity of the vendor and lead to trust issues throughout the transaction.
New 2-stage vendor survey launched
Taking the idea of the vendor survey one step further, TFT, who in the last 12 months have carried out over 100 vendor surveys for Tesco, has devised and launched its 2-stage vendor survey, a tailored service designed to help the seller achieve maximum value.
The first stage will identify any potential deal breakers and highlight those items that might need further investigation and, if possible, resolution by using a managed and co-ordinated team to carry out: surveys of the building and the building services, an initial environmental assessments, specialist reports and testing of the building physics and title reviews.
This detailed analysis then allows the vendor to make an informed judgement on the need to apply corrective action or management to improve the sale value of the asset, such as carrying out renovation or repair works, serving schedules of dilapidations on the tenant to record their disrepairs or the instigation of statutory body researches to explore the environmental risk rating.
The second stage of the process is to review the initial survey taking in to account the new information and produce a comprehensive package of fully warranted and assignable reports, including Energy Performance Certificates, that can be provided to the purchaser and their funders. These reports will show an improved market proposition as a result of time and effort being expended to deal with the issues arising and identified in the first stage. This stage will also need to ensure that any gaps between the various disciplines are plugged so that the final vendor’s report provides buyers with a complete review of the property or portfolio.
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