Why you need a valuation
As you know, the purchase of a property is likely to be most important financial transaction you will enter into. The paperwork which we, as your solicitors, will undertake only relates to title issues. We cannot advise you on the state and condition of the property, or whether the property is worth what you are paying.
The contract paperwork that you will be asked to sign will indicate that, as buyer, you have inspected and surveyed the property and have satisfied yourself regarding its actual state and condition at the date contracts are exchanged, whether or not you actually do this. There is nothing that can be done about any defects that you may discover after exchanging contracts or completing the transaction.
It is therefore essential that you have the property thoroughly checked out by an expert. There are various types of inspections that you can obtain which are outlined below.
Mortgage valuation
Your lender (i.e. your bank, building society or other lending institution) will usually obtain a mortgage valuation by its in-house survey department or a local chartered surveyor. This report is obtained to satisfy the lender that the house is good security for the proposed mortgage loan. It is not, in the true sense, a survey.
The report typically indicates the age and type of property, its construction and general state of repair and may go as far as indicating any serious apparent defects. However, since it is only for the lender’s purposes, you may not receive a copy of this report. Therefore, such a report is very limited in its scope and you should consider taking out a more comprehensive survey as detailed below.
For an additional fee, it may be possible to arrange for the person carrying out the report for the lender to carry out a more detailed survey and report for you at the same time. This may be less expensive than commissioning another survey or carrying out a separate inspection. However, not all lenders provide this additional service. It may be worthwhile having a word with your mortgage lender, or your broker, to see whether or not this is possible.
A Home Buyers Report and valuation
This is a "middle" range report, which is more detailed than a mortgage valuation. It will usually extend to several pages which will include a valuation of the property and suggest a re-instatement value for insurance purposes. The surveyor will inspect the main structure including the roof, if it is accessible, and will usually take moisture level readings in case of damp.
In the case of a leasehold flat, this will also cover the condition of any common parts and services for which an additional service charge may be payable. As this is a more detailed report, a Home Buyers Report is likely to be more expensive than a mortgage valuation, but provides you with the knowledge that the property is sound or if any matter needs further investigation.
A full structural survey
This is particularly useful for older or larger properties but should not be discounted in other cases. The surveyor will report on everything that is visible - from the outside of the roof to under the floorboards, where practicable. In addition to looking at the structure of the building and any outbuildings, this type of survey will also include comments on any nearby trees that may be causing damage to the property and will also detail water and drainage services. The surveyor may suggest that you undertake further tests, for example, if damp or dry rot is suspected, or may even suggest a specific structural engineers report is obtained if a structural problem is detected.
This report is the most expensive option but does provide you with some recourse in the unlikely event that the structural surveyor has missed something on the report that would have been apparent to another surveyor.
Conclusion
We will be happy to discuss any of these types of valuations and surveys with you and to put you in touch with a surveyor who can act on your behalf, if you so wish.
Please note however, that these notes are in general terms and should not be taken to be full, accurate or precise. In each and every case, a buyer should consider which report they wish to obtain, taking into account the type of property to be purchased, the level of report required and the cost involved.
