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There are various types of report which you can choose to have carried out on the property you intend to buy.
If you need a mortgage to buy your new property, even if it makes up just a small part of the purchase price, your lender will insist on a surveyor’s valuation of the property before agreeing to provide the mortgage. The fee will be dependent upon the purchase price although some lenders have set scale fees.
A valuation is not a survey – it is a property inspection undertaken, usually on behalf of the lender, for the sole purpose of deciding on the amount and terms of any loan. The extent of the inspection is very limited when compared to a survey. No potential buyer should rely solely on the information provided by a mortgage valuation when deciding whether or not to purchase. Unless, perhaps the property offers a warranty provided by NHBC, Zurich or an Architects Certificate in the case of “one off” properties.
Valuations can also be provided to individuals on acquisition for peace of mind. Ask for a recommendation as to the surveyor you should be appointing.
In certain instances the valuation figure may not equal the purchase price. This may be due to a number of factors, including the condition of the property and whether it is unusual or unique. If you recognise that you are already paying a premium for the property, this may be reflected in a differential between the purchase price and a valuation price.
A chartered surveyor can provide a professional opinion of the property under consideration. Where defects are discovered, it is sometimes possible to renegotiate the purchase price to reflect works required. There are two types of survey:
It is intended for use on conventional types of property and focuses on the significant defects and problems which have an affect on the value of the property. It will also confirm whether a property is in reasonable condition. Comment is limited to those areas which are accessible at inspection.
To save time and money you maybe able to ask the surveyor who carries out the mortgage valuation report to also undertake a homebuyer’s report.
This is more comprehensive than a Homebuyer’s report and provides extensive information on construction and materials used as well as both major and minor defects. Costs are dependent upon the size and nature of the property.
In certain instances, where significant defects are identified, the surveyor may recommend further investigation by an engineer or other technician.
Once the likely cost of repairs can be ascertained, there may be grounds to renegotiate the purchase price should these costs be considerable, unless of course the property’s condition has been reflected in the asking price.
Where a mortgage is required, the lender may hold back certain monies in the form of a retention until such remedial works have been carried out.
Building surveys do not automatically include valuations.
This often leads to difficulties between buyer and seller, given that the prospect of price renegotiation is always an emotive one. If the property was not priced to take into account of any defects, a rational approach is by far the best way forward. Quotations for the remedial works should be obtained. Verbal exchanges by telephone or letter rarely lead to a satisfactory outcome in these circumstances because of the personal nature of the transaction involved. Therefore a meeting between the estate agent and other parties often achieves the desired result.
The Royal Institution of Chartered Surveyors can help you here by providing the contact details of registered surveyors in your area. Their number is 020 7222 7000. Your estate agent can help too and will be able to pass on the contact details of the best local firms.