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Once you have agreed on a price for a property then you will need to instruct a survey to be completed, there are two main reasons for this. Before the banks will lend you any money they will want to ensure that the property is worth the amount that you are looking to borrow to pay for it, after all the lender will technically own a portion of the property until the mortgage has been completely paid off. Also a survey will highlight any significant problems with the property that may be costly to resolve later down the line. Essentially the survey is there to protect both yours and your lender’s interests.
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From June 1st 2007 Home Information Packs will be introduced. These documents will require sellers to provide a Home Condition Report which is similar to a survey, however this step has not yet been formally introduced and the government
are yet to confirm when they will become a mandatory requirement. For the time being
it is the buyer’s responsibility to assess the condition of the property, usually
by way of a survey.
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Surveys are typically one of the larger outgoings involved in buying a new home and you may ask yourself the question is it really necessary, especially if you have taken the time to thoroughly look over the property yourself. There is no doubt however that a qualified surveyor will identify problems that you have overlooked and if you decide at this stage that you do not need a surveyors report you may find there could be large financial implications later down the line. For a few hundred pounds a survey may determine whether or not you wish to proceed with the purchase of the property and if the outcome reveals problems with the property then this may put you in a position to renegotiate the price. Here are a couple of points that will help you decide if you need a survey completed or not:
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How old is the property? Unless the property is very new then there could be a range of underlying problems that are not immediately obvious. Older properties will often cost more to repair in order to maintain their character.
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What is the value of the property? A larger investment presents a larger risk, you would undoubtedly feel more secure having the property looked over by a professional if the value of the property is relatively high.
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A basic valuation is separate to a survey and is usually carried out by the lender to determine if you are offering what they think is a fair price for the property. In many cases the lender will send someone out to take a picture of the property from the outside, this is called a ‘kerb side valuation’ They will look at the condition of the property and correlate this with property transactions that have occurred within your area to conclude if the price is fair and inline with the average. More detailed valuations will be carried out on higher value properties.
The cost of a basic valuation depends on the lender and the value
of the property and will range from between £50 - £300, this is usually factored
into your mortgage, however some lenders choose to waive this cost to attract new
customers.
If the lender decides that the property is worth less than what you are offering
then they may retract the mortgage offer or request that certain work is carried
out before they accept the offer. If this is the case then it may allow you to renegotiate
the price with the seller, that’s if you are still interested.
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A ‘Home Buyers Report’ is carried out by a surveyor and is more comprehensive than
a ‘Basic Valuation’. You can instruct the surveyor who is carrying out the basic
valuation on behalf of the lender to complete a home buyers report at the same time.
The home buyer report will help you identify any serious problems with the property.
The survey covers the property’s general condition and assesses major faults in
accessible parts of the property that may affect its value. The surveyor will not
lift carpets, shift furniture, test drains, wiring or water supply [but may comment
on their condition], or inspect areas difficult to access.
The survey will usually reveal any urgent matters that need to be assessed before
contracts are exchanged and make recommendations for further inspections. The report
will usually include the results of dampness testing, condition of timbers (including
woodworm or rot), condition of damp-proofing, insulation, drainage, cost of reconstructing
the building in the event of damage for insurance purposes.
A home buyers report will usually take around 1-2 hours to complete
and cost in the region of £300 - £400.
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A ‘Full Structural Report’ is usually advised on older properties, renovated properties, listed buildings and buildings of a non-standard design. This is the most comprehensive survey you can obtain on a property and will cover major and minor faults as well as their implications and the cost involved in resolving them. A number of tests are carried out on the interior and exterior walls to assess their structural condition and signs of damp. The surveyor will also look at the insulation and damp proofing measures, drainage and use of materials. When the report has been compiled the surveyor may make recommendations to have certain areas inspected by a specialist.
The finished report will be very detailed and may seem to list endless defects with the property, do not be put off by this as most properties have minor problems here and there. A surveyor is legally obliged to present the buyer with all of their findings while assessing the property. A full survey will usually take 3-5 hours depending on the size and condition of the property. The cost will usually be somewhere in the region £600 -£800.
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