Buying a house – do you need a survey?
Traditionally, most house buyers that are funding their purchase by way of a mortgage will rely upon the Bank to provide them with a mortgage valuation and will regard the mortgage Valuer’s report as an assurance as to the property’s suitability of condition. However, partly due to the recent pandemic but mainly due to lending institutions increased reliance on computer generated valuations it is increasingly less likely that the Bank will undertake an inspection of the property prior to offer of mortgage. Therefore, the only way to ensure that the property is inspected by a qualified professional is to instruct your own Surveyor.
When you have decided that it would be prudent to have the property inspected before committing yourself to purchase, you have four options:
Option 1 Open Market Valuation.
Option 2 Full Home Condition Report without valuation.
Option 3 Full Homebuyer Report with valuation.
Option 4 Building Survey.
Option 1 – Level 1 inspection – Open Market Valuation
An open market valuation is similar to a mortgage valuation, the purpose of this is to tell the purchasers your purchase price is a fair reflection of the condition of the property. For example, if you are buying a property that is in poor condition, but you are buying it cheaply to reflect its condition then the Valuation Report will hopefully say that the purchase price is a fair reflection of the property’s value and that the condition is poor. It will not give you any guidance on what the necessary repairs are, it will just advise that this is reflected in the price you are paying for the property.
Option 2 – Home Condition Report or Level 2 Survey – without valuation
The level 2 survey or Home Condition Report is an extensive survey of the property which gives a report on all elements of the property from chimneys, roofs, walls, internally room by room, covers all internal fixtures and fittings and a visual inspection of all services including lifting of inspection chamber covers to view underground drains, inspection of the roof void and testing for dampness to walls. It is a detailed report which gives advice upon the condition of the property, will advise on all repairs including those that are routine for a property of that type and age. It will advise on significant repairs that may have a bearing on the overall value of the property and it will also give guidance on any areas that may require further specialist investigation to get a full picture. The Home Condition Report does not include a valuation and so cannot reflect the condition of the property in the valuation.
Option 3 - Homebuyer Report – Level 2 survey with valuation
This report provides all the same information as a Home Condition Report but does include a valuation allowing the opportunity for the Surveyor to reflect the condition of the property in their valuation.
Option 4 - Level 3 Survey – RICS Building Survey
This report provides a lot more technical detail of the property’s construction and is generally considered most appropriate for properties that are significantly old i.e., over 150 years of age or possibly non-traditional built i.e., period timber frames, prefabricated or homes that include a variety of construction types possibly due to extensive extensions.
In deciding what level of survey is right for your needs it is always useful to speak first to your chosen Surveyor who will guide you through various options and it may also be useful to speak to your Bank or Mortgage Advisor to ascertain as to whether your Mortgage Lender has undertaken any sort of inspection of the property.
If you are fortunate enough to be a cash purchaser, the same four survey options are available to you. It will also be advisable to speak to your surveyor before making your choice of survey and certainly before entering into legal commitment to purchase.
Please feel free to give West Midlands Surveys a call on 0121 355 0095, asking for Mike or Lynne who will happily talk you through your various survey options.