The Different Types of House Survey and The Cost of a Survey
You are one lucky person if in the process of buying a house you do not need to borrow from any financial institution or lending company. It is everyone's hope not to have a mortgage when buying a house but very few can realize this objective. In the UK and the rest of the world, it is required that any property that is to be bought gets a valuation in order to assess the true value of the property.
The valuation is a property inspection for the use of the lender or the mortgage company so that they could process how much they could lend to the borrower. A valuation is very limited in scope and would not really present to the prospective buyer the physical and structural condition of the property.
There are two other main types of surveys for a home in UK: homebuyer's report and the buildings survey. Surveys are expensive. As a prospective buyer you have to pay for the valuation of the property and you might not actually want to pay for the other two types of surveys. You may opt to do the inspection yourself but a trained professional will be able to see problems and possible future problems in the property that you are considering. If defects are uncovered in the process you might withdraw your offer to buy or you might renegotiate the price. Buying a house is a big investment and you can never be too careful in your house surveys.
Types of Housing Survey
Aside from the Valuation survey there are the Homebuyer's Report and the Buildings survey. Choosing the right survey for you largely depends on the condition of the property. A survey should be done and its result considered before you seal any form of agreement with the lender and the seller. This is to ensure that you will be in a position to negotiate the price of the property in case defects or problems are found. If major defects are found, the lender might even ask the seller to do repairs before releasing the mortgage.
This survey is for the use of lenders. They need to know that they are not lending you more than the property's real worth and that if you sell it, you'll at least as much as what you paid for. This survey is not a survey per se but more on evaluation.
The valuation of a property is requested by the mortgage lender and is actually for their benefit. However, you pay for the survey. The market value is largely based on the physical condition of the property and also estimated by comparing it to the prices of other similar houses in the area sold recently. If the house value is found to be lower than the purchase price then you might not get the mortgage or the mortgage lender might insist that the seller do repairs first to up the value of the property. You might also renegotiate the selling price of the house to make it level with its appraised value.
Home Buyer's Report
This survey is more detailed than the valuation survey and is geared for your own benefit. A home buyer's report is not inexpensive but this form of survey is valuable to you and is definitely worth the price. The home buyer's report is detailed enough for you to decide if you want to continue with the purchase at the present price and for you to consider any major defects on the property. This type of report is recommended for homes that are 50 to 75 years old and are in good condition and are constructed of conventional materials.
The report would include reports on the condition of visible parts such as the roof, walls, ceilings, flooring, and such. The surveyor can point out areas that could be problematic later. Any other issues that need to be addressed to your solicitor will also be indicated on top of the estimated value of the property. However, it is recommended that you do an ocular inspection yourself. List down some of the pertinent aspects that you want checked. For example, you can't expect the surveyor to check every outlet in the house if it has electricity. You can't expect the surveyor to turn on each faucet and see how long it would take for hot water to run in the taps.
Normally, a home buyer's report inspection would be done within five days after your request. The inspection would take an hour or two to complete and the results delivered three to five days later. A home buyer's report could cost from £200 to £500, depending on the price of the house.
This is a very costly survey that a newer home could do without this type of survey. A building survey is highly recommended for homes that are: more than 75 years; has unconventional construction materials such as timber and or thatch; has undergone a lot of renovations, extensions or you intend to alter or extend.
Generally, the surveyor will look into all the visible and accessible aspects of the building. He will examine for the soundness of the structure, its general condition regarding both major and minor defects. If the house is really old, then additional specialists may be called on to check for the soundness of its foundation and footings, damp proofing, insect and pests infestations, its heating and cooling system and more.
The building survey would take double the amount of time spent in a home buyer's report. The building survey report that you will receive will be long and "boring" but you have to read them anyway so you will know what you are getting into. However, don't get readily discouraged by the seemingly long list of defects that you will read. The surveyors are probably just listing down all of them for a worst-case scenario. For every defect, there would be a complementing list for repairs and maintenance that are probably over-priced too.
A building survey would cost about £1000.
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"very clear, measured and helpful"
"An excellent overview of the types of surveys available - thank you very much!"