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Helpful Advice

Choosing Between Surveys

Choosing Between Surveys

By Peter Barry

When a mortgage is required to purchase a property, the lender will have their own valuer visit to ensure that their loan is adequately secured. People often confuse this brief valuation report with a survey but they are very different propositions.

Most mortgage valuations consist of a twenty-minute inspection and a report that, at best, will give you a few lines of general advice, whereas a survey will allow you to enter into the purchase with your eyes open.

Why is a survey important?

The Council of Mortgage Lenders and the Building Societies Association advise you to get a survey before buying a property and not just to rely on a valuation. This is to ensure that you fully understand the condition of the building you are about to purchase, as well as the associated costs and repairs it may require in the foreseeable future.

In addition, property surveys can actually save you money. If problems are highlighted that you could not have been aware of when your offer was agreed, you should be able to re-negotiate the sale price to reflect the cost of necessary repairs. Of course, you may decide that you don’t want to buy it at all. 

What property surveys are available?

The Royal Institute of Chartered Surveyors categorise surveys by ‘levels’ ranging from 1 to 3. A level 1 survey is a very basic condition report – not all surveying companies will offer this survey as some consider it too basic to be of any use to their clients. 

The RICS Homebuyers Report is a level 2 survey. It is a cost-effective method of minimising risk by providing buyers with enough information to make a reasoned and informed decision on whether to proceed with their purchase. Elements, both inside and out, are given condition ratings based on a traffic light system and there are further sections highlighting the risks and summarising issues that you should discuss with your legal adviser. The Homebuyer Report can also include both the market value and the estimated reinstatement cost if required. 

A Building Survey is a level 3 survey and is a very detailed report. Although some restrictions may still exist to avoid the property being damaged, such as removal of carpets or wall panelling, the survey will be thorough. A building survey not only describes the visible defects but considers potential problems caused by hidden flaws and provides an outline of repair options and the likely consequences of inactivity. 

So, remember, relying solely on a lenders valuation when buying a property is a big risk. The lenders priority will be to check that should they have to force a sale in the future the property will be worth at least the amount they have loaned. They won’t therefore be interested in the many smaller repairs and maintenance issues which could end up costing you several thousand pounds once you move in. When you find a property to buy enjoy the peace of mind that comes with a report from an experienced Chartered Surveyor.