You and your lender should know if the property is truly worth the amount of money you have settled to work with. There are two types of survey: the buildings survey and the homebuyer’s report. All lenders require a basic valuation, but it is strongly recommended that you should also have your own full survey carried out, as the basic valuation will only highlight the obvious complications that you will probably have noted yourself.
Is there a need for a survey?
Surveys can be really expensive. If you already have the basic valuation for your lender, you may be tempted not to worry yourself with any closer examination of the property by trained professionals. A survey might seem to cost a lot at the time and effort, but it is better to invest in these matters rather than having to pay thousands of pounds for doing major repairs that you may have overlooked when you bought it. Buying a home is a great investment and it is worth giving a few hundred pounds for a vital survey at this stage, as it could save you lots of cash later on.
The Basic Valuation
Every lender requires a basic valuation, as they have to be sure that they won’t be lending more than the property’s worth.
The valuer reaches at a certain value by comparing the property with similar ones, taking aspects such as the property’s condition, age and location into account. The valuation also reveals the very obvious problems which could affect the property’s worth, but it is very brief and not nearly as thorough as a real survey.
The basic valuation is appointed by your lender which is for their benefit, but unluckily, it is you who must pay for the deed. If the property is valued lower than the purchase price, then your mortgage offer may be withdrawn. If it does show that the house is worth less than the amount you have settled to pay for it, you may be able to re-negotiate the amount.
The basic valuation takes about thirty minutes and charges fee between £100 up to £300 depending on the price of the property.
The Royal Institution of Chartered Surveyors (RICS) presented the new HomeBuyer Report in July of year 2009. The report was quite a drastic departure from earlier formats and was then further developed following substantial market investigation and overall feedback from the general public. It was intended to be a comprehensible report with less technical terminologies. The most significant change was the starte of colour coded Condition Ratings frequently called as the ‘Traffic Lights System’. The surveyor needs to rate each element of the property by means of one of the following Condition Ratings:
- Condition Rating 1 (green) – No renovation is presently needed. The property must be sustained the normal way.
- Condition Rating 2 (amber) – Defects that need replacing or repairing but are not reflected to be either urgent or serious. The property must be sustained in the normal way.
- Condition Rating 3 (red) – Defects that are in serious need of urgent repairs, and/or to be replaced urgently.
The report will comprise a number of parts which offers valuable information about what the purchaser ought to do next and, mostly in the case of leasehold properties, any queries that the legal advisers must make before the exchange of contracts.
Section C is useful to the buyer as it offers an outline of the Condition Ratings for each part of the building and contains a concise part giving the surveyor’s general opinion about the property. This will include a remark as to whether or not the surveyor considers the arranged purchase price to be sensible.
Section D contains a short section about energy efficiency and will consist of reference to the Energy Performance Certificate that must be ready before a property is marketed.
Section G has an outline of the condition of the services based on visual inspection. If the property is unoccupied, the services may have already been disconnected. The surveyor will not be able to turn services on, except when the vendor is present and is able to turn them on. The surveyor will advise for any further investigations if these are considered to be appropriate.
Section J a brand new aspect of the report that identifies any risks to the property, grounds or residents. This could cover problems such as the possibility of flooding, an unprotected pond that could be a hazard to small children, or any presence of asbestos based materials.
The feedback received to date, shows that the new Homebuyer Report has been well-acknowledged by the general public, and that the Condition Rating System is proved to be very helpful to the prospective purchasers.
There is a shortened version of the Homebuyer Report called ‘Condition Report‘ which comprises many of the features previously discussed. The Condition Report does not, however, contain a Valuation or recommendation on any possible repairs and maintenance that needs to be made. The Condition Report can be ordered by vendors, before placing their property on the market, to avoid any unexpected issues to pop up when their prospective purchaser already has a mortgage survey or valuation carried out.
This part is the most complete and comprehensive (not to mention the most expensive) kind of survey. It is appropriate for any property, but is particularly recommended for older buildings that have already been around for over 75 years and upwards; properties which have had lots of extensions and alterations, and those that were constructed out of unusual and uncommonly used materials.
The surveyor will check the property carefully, looking at every examinable aspect, its general condition and all minor or major faults. They also carry out on elements such as damp proofing, foundations, or tree roots, either by a specialist inside the firm of surveyors or by an independent surveyor.
The kind of report you will receive will be very long and extremely thorough, as surveyors are lawfully obliged to notify you of all the conclusions upon the survey. A full structural survey usually takes much longer than the few hours needed for the homebuyer’s report. The survey report can also take quite a long time to create, so this is a much extensive procedure than a homebuyer’s report. You will most likely wait for up to two weeks after the inspection. A building’s survey can cost for up to £1,000 depending on the price of the property.
Searching For A Surveyor
Finding a surveying company is really not that difficult. Inquiring for recommendations from your estate agent, lender and solicitor is probably the easiest way of having a trustworthy surveyor. However, you could always contact one of the professionals to do this vital task.
Look around and get sufficient amount of quotes, as it costs a lot to get a survey done and fees can vary differently. The amount you pay typically depends on the price of the property you intend to purchase. It is essential to discuss the fee before doing the survey and what kind of survey will be carried out.
Paying more than once for a survey can be possible, if you decide not to purchase the property based on the survey results and carry on looking for other options.
It is recommended to check the surveyor’s credentials if you are unconfident that they really are a competent and skilled professional. Also, it is important to talk with your lender before assigning tasks to the surveyor, as you could probably get the basic valuation done at the same time, which could drastically reduce the costs.
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