Dear Heather,

I have put in an offer on a house, subject to a structural survey. The survey has come back and there are more things wrong than I thought. Now what happens?

Potential Buyer

Dear Potential Buyer,

It really depends on if the sale and purchase agreement has been signed, and how it’s worded. If it hasn’t been signed, then you are free to decide whether or not you want to proceed with the sale. If it has been signed but the structural survey is a contingency, you are able to withdraw if you deem the structural survey unsuitable.

However, if the sale and purchase agreement has been signed and does not read “subject to a structural survey” then unfortunately you are bound to proceed with the sale; it is important to discuss these things with your lawyer when you are reviewing the contract.

I met with Phillip Mason of Mason and Associates Ltd.

He has completed more than 700 structural surveys in Bermuda and gave this advice: “It is important to understand that very few properties are ‘perfect’, even brand new ones. Our reports colour-code items that are considered routine maintenance in orange, and highlight significant defects in red. We provide a summary of findings, together with a budget estimate of the cost, to correct the issues we find.”

As most property purchases are time sensitive, Mr Mason promises his company can turn around an inspection and report within two business days following the site visit.

Properties in Bermuda are sold in “as-is” condition by the vendor. There is a “caveat emptor” approach — which means buyer beware — but agents are bound to disclose any defects that they are asked about.

If, however, the property is owned by a trust or institution, it is accepted that the owner might be completely unaware of any defects and therefore unable to instruct the agent accordingly. These are usually the properties where a structural survey can be most beneficial to the purchaser. The question is not whether or not the property needs work, but how much.

Mr Mason indicated that if the items listed in the report are routine maintenance and would be considered obvious during a walk through, ie interior walls that are in need of painting, floors that are in need of refinishing, etc, then it’s fair to assume the property is fairly “normal”.

However, the report could highlight significant costs related to areas you would not normally have convenient access to, such as the roof space or inside the tank.

If there are a long line of items outlined in red that the buyer was not expecting — serious and unsafe issues with old wiring, for example — then this might be a good time to either go back to the negotiating table or walk away.

The base cost of a structural survey inspection performed by Mason and Associates Ltd is approximately 95 cents per square foot, and includes everything from the roof to electricals to fixtures and grounds.

Different companies’ fees may vary, however when spending money as significant as the cost of Bermuda real estate, the value of a structural survey inspection can help ease the buyer’s mind.

It also allows the process to reach a fair and equitable conclusion for both parties. There are several firms offering structural surveys in Bermuda, so choose one that you feel is knowledgeable and efficient, and ask for a sample report.

It would be advisable to speak to your agent about the survey report to get feedback. Additionally, it may be advantageous to get contractor quotes for major repairs, prior to finalising your negotiations.

• Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for nearly 30 years. Contact her at hchilvers@brcl.bm or 332-1793. All questions will be treated in confidence. Look for Ask Heather Real Estate on Facebook