Surveys explained

In order to hand over any money, your mortgage lender needs to know what the property is actually worth. And you need to know whether the property is sound or has an horrendous list of problems lurking in the background. Enter the surveyor, who knows about these things.

Of course, it’s not quite as straightforward as that. One survey is not the same as the next. There are different kinds, and you need to be clear which kind you need.

Basic Valuation

If you’re borrowing money from a lender, they need to know that not they’re lending you more than the property is worth. So this ‘survey’ is all about money – the valuer compares the property with other similar ones and basically works out what it’s worth on the market. A valuer will point out any obvious problems, but a basic valuation is very brief, only takes about half an hour to complete, and is not a proper survey. It’s for the lender’s benefit – although you usually have to pay for it.

Homebuyers Report

Now, this kind of survey is for your benefit rather than your lender’s. It’s less comprehensive than a full structural survey but it’s enough to make you aware of any significant problems and give you a more in-depth picture of to the property’s state of repair and maintenance. It covers all the parts of the property that are visible, and may recommend some more specialist surveys. But it’s designed for properties that are generally sound and it’s not recommended for properties older than 75 years. You can ask your lender to arrange for their surveyor to do a homebuyer’s report for you at the same time as the basic valuation is carried out.

Full Structural Survey

Also known as a Building Survey, this is the full monty. The surveyor will check out everything visible or in reach to assess the condition and soundness of the property and all faults, big and small. As a result, you’ll get a massive long thorough report that looks very worrying indeed. But bear in mind that surveyors are legally obliged to tell you about absolutely everything they spot, and they aren’t paid to look on the bright side – all properties have some defects, you probably just need to be concerned about the serious ones.

This kind of survey costs a lot more and it can take two or three weeks to produce. But if you’re looking at buying an older or unconventional house, or a property that has had a lot of extensions or renovations, you’d be wise to consider it very seriously. As always, shop around when choosing a surveyor – ask your solicitor and lender for recommendations and get a range of quotes, but make sure you choose someone who is a member of the Royal Institution of Chartered Surveyors (RICS).

Home Information Pack (HIP)

This is a collection of documents that the seller must provide from day one to give you some important information about the property before you incur any costs in surveys and legal fees. As of January 2008, the pack should include:

Most of these documents are already used during the home buying process, but the Energy Performance Certificate is something new – it tells you the energy efficiency rating of the property and its impact on the environment. You can find out more about HIPs and the latest information that the seller must provide at the Home Information Pack website

*Interesting Fact: Green news from the Energy Saving Trust - fitting insulation in the average uninsulated loft cost about £110 and can save nearly one tonne of carbon per year.

So do you really need a survey?

Surveys are not cheap, and it’s tempting to think about all the other more exciting things you could spend your money on instead… but unless you’re going for a new or relatively new home, buying a property that hasn’t been looked at by a professional surveyor can be a real risk. If your survey reveals a fault in advance, you have the choice to withdraw from the purchase – or you may be able to negotiate a reduction in the asking price, which may more than pay for the cost of the survey.

 

*Energy Saving Trust website January 2008