Condition report: All you need to know to buy or sell a home
Condition report
Are you selling or buying a home? A condition report can be crucial to a successful property transaction. The condition report gives you a thorough and objective assessment of the home’s technical condition, allowing you to make informed decisions and avoid unpleasant surprises after the sale.
Why is a condition report so important and what should you actually look for? Here we give you the answers to the most frequently asked questions, so you can go into your home sale with confidence and knowledge.
We can also provide you with a free, no-obligation quote from a local surveyor.
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What is a condition report?
A condition report is a detailed description of a property’s technical condition, prepared by an independent and certified appraiser. The report provides a systematic review of the home’s various building components, from the foundation and drainage to the roof and chimney. The surveyor will register any discrepancies, damage or faults, and assess what should be repaired or maintained.
The condition report follows a standardized carpenter and uses a graded scale to describe the condition of each building part. This makes it easier for the buyer and seller to gain a common understanding of the condition of the property. The report also includes information about the home’s age, size, construction and changes.
The purpose of a condition report is to create transparency and security in the property transaction. Both seller and buyer get an objective and professional basis for decision-making, which can contribute to an orderly process and reduce the risk of conflicts after the sale.
What does a condition report cost?
The price of a condition report varies depending on the size, age and complexity of the property, but in most cases a condition report will cost between NOK 5.000 and 15.000.
For apartments and smaller homes, the price is often in the lower range, around NOK 5.000 to 12.000. Larger detached houses, especially older houses with several floors and extensions, can cost up to NOK 15.000 or more. Prices can also vary somewhat depending on geographical location and the appraiser’s hourly rate.
Price examples
- Apartment up to 100 m²: from NOK 5.000
- Apartment 100-150 m²: from NOK 7.000
- Apartment 150-200 m²: from NOK 10.000
- Apartment over 200 m²: price by agreement
- Terraced house, semi-detached house, detached house up to 150 m²: from NOK 11.000
- Townhouse, semi-detached house, detached house 150-250 m²: from NOK 13.000
- Terraced house, semi-detached house, detached house 250-350 m²: from NOK 14.000
- Terraced house, semi-detached house, detached house over 350 m²: price by agreement
Although it can be perceived as a high cost, a condition report is an important investment when selling a property. The report gives you valuable insight into the condition of the property and can contribute to a smooth and orderly negotiation process. In the long run, a thorough condition report can actually save you considerable expense by preventing you from selling a property with hidden faults or defects. As a seller, a condition report can also contribute to a higher selling price, as interested parties will appreciate the extra security and transparency that the report provides.
What does the appraiser go through?
During the inspection, the appraiser will inspect all accessible and visible parts of the property. This includes, among other things:
- Foundation walls, drainage and foundations: The appraiser will look for signs of settlement damage, cracks or moisture penetration in the foundation wall, as well as assess whether the drainage around the home is working satisfactorily.
- Load-bearing structures such as walls, floor partitions and roof structures: Here, the valuer will check whether the load-bearing elements are in good condition, with no serious distortions, deformations or rot damage.
- Exterior walls, windows and doors: The surveyor will inspect the condition of the cladding, windows and doors, focusing on tightness, insulation and any rot or wear and tear.
- Roofing, gutters and downpipes: The condition of the roof is carefully inspected, including roofing, fittings, gutters and downpipes. The surveyor will look for leaks, rust or other damage that could affect the roof’s function.
- Bathroom, wet room and kitchen: These rooms are checked for moisture damage, membrane breaks or faults with drains and pipe penetrations. The appraiser also checks whether the wet rooms are built in accordance with current regulations.
- Heating, ventilation and sanitary facilities: The surveyor checks the condition and function of heating sources, ventilation systems, pipes and drains. Age and maintenance needs are key elements.
- Electrical system: The electrical system is checked visually, focusing on visible faults or defects that could pose a safety risk. The appraiser can also comment on whether the system is of an older date and recommend further investigation if necessary.
- Pipe and fireplace: The appraiser inspects visible parts of the chimney and fireplace for cracks, loose plaster or other damage. The need for sweeping or maintenance is commented on.
In addition to the visual inspection, the appraiser will use technical aids such as moisture meters, level instruments and measuring tools where relevant. If conditions are discovered that may indicate hidden defects or deviations, the appraiser will draw attention to this in the report and possibly recommend further investigations.
Based on the appraiser’s observations and assessments, the condition report will provide a detailed description of the technical condition of the property, with clear recommendations on what should be repaired or maintained, either immediately or in the long term. The report thus provides a solid basis for decision-making for both buyer and seller in a property transaction.
What do the different condition grades mean?
A condition report uses a standardized grading scale to describe the condition of the various parts of the building. The scale ranges from 0 to 3, with each grade indicating the following:
- TG0 (No deviations): The building element is like new and has no visible symptoms of wear or damage.
- TG1 (Minor or moderate deviations): The building element has normal wear and tear and signs of use, but no significant damage or need for repair.
- TG2 (Significant deviations): The building element has damage, defects or deficiencies that should be repaired or replaced. The nonconformities may have consequences for other building elements or increase the risk of damage.
- TG3 (Major or serious nonconformities): The building element has extensive damage or defects that require immediate rectification. The non-conformities may have major consequences for other parts of the building, safety or the function of the home.
In addition to the degree of condition, the report also describes whether there is a need for immediate action, further investigation or regular maintenance. This provides a clear prioritization of which conditions are most critical to address.
Why should you have a condition report?
1. Peace of mind and transparency: A condition report provides an independent and objective assessment of the property’s condition, which creates peace of mind for both buyer and seller. The report highlights any defects or deficiencies that may affect the property’s value and future maintenance needs.
2. Better basis for decision-making: A condition report gives you a solid factual basis for assessing the actual condition and value of the property. As a buyer, you can make informed choices about whether the property meets your needs and expectations, while as a seller you can set the right asking price and avoid unpleasant surprises afterwards.
3. A tidy property transaction: A condition report contributes to a more orderly and predictable property transaction. By uncovering any faults or defects in advance, the risk of conflicts or complaints after the sale is reduced. A thorough condition report can also make the property more attractive to potential buyers.
4. Insurance and financing: Many insurance companies require a condition report to take out a home seller’s insurance policy, which protects the seller against any deficiency claims from the buyer. Some banks and lenders may also request a condition report as part of the mortgage or financing assessment.
How can I get a quote for a condition report?
When obtaining a quote for a condition report, it’s important to choose a certified and experienced surveyor. Start by researching different providers in your area, either through online searches or by asking friends and acquaintances for recommendations.
Look for appraisers who are members of recognized industry organizations, such as NITO Takst or Norsk Takst. These organizations set strict requirements for competence, continuing education and ethical guidelines for their members.
At takserer.no, we work with a wide network of certified and experienced appraisers across the country. Fill in the form on our website with some key information about the property, and we can connect you with the appraiser who is best qualified for your assignment. You’ll receive a non-binding offer and can ask any questions you may have directly to the appraiser. Our goal is to make the process of ordering a condition report quick, easy and safe.
What should I do before the appraiser arrives?
- Tidy and clean: Make sure that all rooms and areas are accessible and clear. Clear away any loose objects, furniture or anything else that could obstruct the appraiser’s access to walls, floors and ceilings. A clean and tidy house makes it easier for the appraiser to detect any damage or anomalies.
- Find relevant documentation: Feel free to collect building plans, completion certificates, previous valuations, receipts for upgrades or other documents that can provide valuable information about the property’s history and condition. The more information the appraiser has available, the more precise and comprehensive the condition report can be.
- Check that everything works: Before the appraiser arrives, you should test that all technical installations and equipment are working properly. This applies, for example, to heating and ventilation systems, panel heaters, kitchen fans, bathroom fans, shower cubicles and washbasins. Also ensure that all windows and doors can be opened and closed normally.
- Note any known defects or deficiencies: If you know of any specific damage, defects or deficiencies in the property, you should make a note of these and inform the valuer about them. For example, this could be moisture damage, cracks in the walls or drainage problems. By being open about known deviations, you contribute to the most accurate and transparent condition report possible.
Is it legal to sell a property without a condition report?
Yes, it is legal to sell a property without a condition report. Neither the law nor the real estate industry requires the seller to submit a condition report when selling a second-hand home. Even though it is not required by law, it is still strongly recommended.
According to the Norwegian Sale of Goods Act, the seller has a duty to disclose information about aspects of the property that the buyer had reason to expect and that may be of significance to the purchase. A condition report is not a legally required part of this duty of disclosure, but can be a useful tool for fulfilling it.
Although it is not a requirement, the vast majority of home sellers choose to obtain a condition report before the sale. In some cases, such as the sale of condominiums or new homes, it may be stipulated in the articles of association or contract that a condition report must be obtained.
As the seller, you are therefore free to decide whether you want a condition report or not. At the same time, it’s important to be aware that the lack of a condition report can make the property less attractive in the market, as potential buyers may become more skeptical about the actual condition of the property. A lack of a condition report can also give the buyer a weaker basis for negotiation when it comes to price and other terms of sale.
Ultimately, selling a property without a condition report can increase the risk of the buyer filing defect claims or complaints after the property has been taken over, with the practical and financial challenges this can entail for the seller.
How long is a condition report valid?
The report is a status description of the condition of the property at the time it was prepared. Because the condition of the property can change over time, the condition report should not be older than one year. If more than one year passes without the property being sold, a new condition report must therefore be prepared.
If the property has undergone significant changes, upgrades or improvements since the condition report was drawn up, you should also consider getting a new assessment that reflects the updated condition.
Some insurance companies and lenders may have their own requirements for how old a condition report can be in order for it to be used as the basis for taking out insurance or granting a loan. As a rule of thumb, the more recent the condition report is, the more reliable and relevant it will be as a basis for decision-making.
However, it is important to emphasize that a condition report can never provide guarantees against future defects or damage. The report provides a snapshot based on what the appraiser has been able to observe and assess there and then.
What is the difference between an e-appraisal and a condition report?
Both an e-appraisal and a condition report are reports that describe the condition of a property, but there are some significant differences between the two:
- Scope and detail: A condition report is more comprehensive and detailed than an e-appraisal. The condition report has a standardized carpenter and uses a grading of deviations, while the e-appraisal does not go into as much detail.
- Time spent and inspection: A condition report is based on a thorough physical inspection of the property, where the appraiser spends time inspecting and assessing all relevant parts of the building. An e-appraisal is based on a combination of statistical models and a simpler physical inspection carried out by a real estate agent.
- Competence requirements: In order to prepare a condition report, the appraiser is required to have special certification and expertise in building technology and valuation. E-appraisals are carried out by real estate agents with more general expertise in property valuation.
- Price and time frame: A condition report is often more expensive and time-consuming to prepare than an e-appraisal, precisely because it requires more extensive investigations and assessments.
- Application area: Condition reports are primarily used in the sale of second-hand homes, as a tool to create security and transparency between buyer and seller. The purpose of an e-appraisal is primarily to arrive at a real market value, which can be used in connection with pricing when selling a home, refinancing, insurance issues or tax purposes.
Both e-appraisals and condition reports can provide valuable information about a property. The e-appraisal is a simpler assessment that can be a useful tool for finding out what a property is worth. The condition report is more comprehensive and describes the condition of the property in detail, and will be an important tool in the home selling process.
What should you look for in a condition report?
- Condition grades: Look carefully at the condition grades given for the various parts of the building. Pay particular attention to building elements with a condition rating of 2 or 3, as these may indicate a need for improvements or repairs.
- Deviations and remarks: Read the appraiser’s descriptions of any discrepancies, damage or defects in the property carefully. Assess the extent and severity of these, as well as the consequences they may have for the property’s function, safety and lifespan.
- Lifetime considerations: Look for information on the estimated remaining lifespan of key building components, such as roofs, drainage, wet rooms and technical installations. This can give an indication of future maintenance needs and associated costs.
- Recommended measures: Pay attention to the appraiser’s recommendations for improvements, repairs or further investigations. These can give an indication of the costs and work that may be incurred after you take possession of the property.
- Area measurement: Check that the areas stated in the condition report are consistent with other sources, such as property advertisements or floor plans. Discrepancies in area can affect the value and uses of the property.
- Year of construction and method of construction: Look for information about when the property was built and what construction techniques and materials were used. Older homes may have different challenges and maintenance needs than newer homes.
- The report as a whole: It’s important to read the condition report as a whole and get an overall picture of the home’s condition, qualities and challenges. Assess the findings against your own needs, expectations and financial constraints.
Why should you buy home seller insurance?
Home seller insurance is an insurance policy that protects the seller against financial losses as a result of defect claims or complaints from the buyer following the sale of the property. Here are some good reasons to consider such insurance:
- Reduced risk: Even if you as the seller have provided all the information to the best of your ability, situations may arise where the buyer believes that there are defects in the property. Home sellers’ insurance will then cover any claims for damages, so you don’t have to pay out of your own pocket.
- Peace of mind in the process: With home seller insurance, you can feel more confident throughout the selling process, knowing that you have extra protection against unforeseen events and claims.
- Legal assistance: If a dispute arises with the buyer, the insurer will assist with legal advice and follow-up of the case. This can save you significant legal fees and emotional stress.
- Increased interest from buyers: Home seller insurance can make your property more attractive to potential buyers, as they know they have extra protection against hidden defects. This can contribute to a faster and more efficient sales process.
- Reasonable investment: The premium for a home seller’s insurance policy is usually a small proportion of the home’s total sale value, but can save you significant costs if the worst comes to the worst.
It is important to be aware that a home seller’s insurance policy does not exempt the seller from the duty of disclosure or liability for deliberately withheld information. The insurance is intended to provide extra security and protection in an otherwise demanding sales process.