Homebuyers could be spending thousands of pounds on repairs once they move in because of getting the wrong survey.
According to Landmark Valuation Services and Countrywide Surveying Services, over a third of people buying a home use the lender’s mortgage valuation rather than a survey to find out about the physical condition before they move in.
A mortgage valuation advises the lender of any possible defects which could affect the value of the property. However, it is limited in scope and only likely to uncover visible problems.
The research found that 65% of respondents correctly stated that the valuation report is for the benefit of the mortgage lender, while 35% thought it is for buyers to determine whether the property is worth the agreed purchase price.
Michael Holden, head of client relationships at Landmark Valuation Services, said: “A study by ComRes for RICS showed that, on average homebuyers spend £5,750 on repairs once they have moved into their homes, which is often down to not getting the right survey done.
“If the public wasmore aware of what surveys and reports are out there, there would be greater transparency for all involved. There is certainly an appetite for home owners to have an understanding of a property’s condition before they buy it however there certainly appears to be confusion as to how this can be achieved.”
Many home owners also do not know who is responsible for advising on the physical condition of a property prior to purchase.
One-fifth of respondents said they used the details provided by the estate agent to assess the condition of the property prior to completion, while 12% stated that they did not know who is mainly responsible for advising buyers on the physical condition of a property.
When asked what would improve the home-buying process, seven out of 10 said they would like to receive information upfront regarding the condition of the property.
Types of survey
Your home is likely to be the biggest purchase you ever make, so it is worth getting a property check by a surveyor to find out the extent of any repair work needed.
This could save thousands in the long run and maybe even help you negotiate the price down.
There are three main types of survey – the Condition Report, the Home Buyer Report and the Building Survey (also known as the full structural survey). The level of survey you need depends a lot on the individual property you are buying.
Condition Report
The Condition Report is the most basic survey and will give you an overview of the property’s condition, highlighting any significant issues. It is an entry level inspection that is appropriate for modern houses in good condition.
It does not include a valuation of the property or advice on future repairs and maintenance.
Home Buyer Report
The Royal Institution of Chartered Surveyors introduced the current Home Buyer Report in July 2009.
It employs the traffic light condition ratings scheme – green, amber and red – to highlight the seriousness of the defects.
The report is divided into easily readable sections and includes a number of appendices which tell buyers what they ought to do next.
Probably the most important section is the surveyor’s overall opinion of the property and whether or not the surveyor considers the agreed purchase price to be reasonable. Elsewhere there is an overview of the condition of the services based on a visual inspection.
The surveyor will also look for any potential problems such as flooding or the presence of asbestos-based materials.
Building Survey
The Building Survey is the most comprehensive and is suitable for any building, especially older ones or those constructed out of unconventional materials. For most houses or flats built of traditional stone or brick construction and in apparent good condition a Homebuyer Report is more than enough.
A Building Survey will examine the soundness of the structure, its general condition and all major or minor faults. More specialist surveys can also be carried out on aspects such as foundations, damp proofing, or tree roots, either by a specialist within the firm of surveyors or by an independent specialist surveyor. The report is extremely thorough as surveyors are legally obliged to inform you of all the findings of the survey.
A full Building Survey normally takes much longer than the one or two hours required for the Homebuyer Report and can cost anything up to £1,000, depending on the price of the house.
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