A mortgage valuation is not a survey. It is not intended to inform a buyer of the condition of the property.
Is a mortgage valuation the same as a survey?
Many buyers who have had a valuation carried out for their mortgage are under the impression they have had a survey. Many buyers ask the question “is a mortgage valuation the same as a survey?” A mortgage valuation is not a survey. It is not intended to inform a buyer of the condition of the property and some lenders do not release a copy to the purchaser. The valuation is arranged by the mortgage company and may be carried out either by an in-house valuer, or a valuer on their panel. The purpose of the valuation is to confirm to the mortgage lender the value of the property in the event that the home owner defaults on the mortgage payments the lender needs to know that the property offers sufficient security for the loan.
For an average 3 bedroomed house the mortgage valuer is likely to spend no more than 20 to 30 minutes carrying out the inspection. The valuer will not normally get into the roof space (head and shoulders inspection only) and will not usually lift back edges of carpets, open windows, run water down the drains, etc. Part of this time will be spent measuring the property in order to calculate the rebuilding cost therefore the inspection itself will not be detailed.
In comparison, a surveyor carrying out a survey on the same property is likely to spend around 3 hours carrying out the inspection, although the actual time will obviously vary from one property to another. The surveyor will normally carry out a detailed inspection of the roof space (if safe access is available), lift edges of carpets (where possible) to check the construction of the floors, open windows, run water down the drains (where possible) in addition to inspecting other parts of the property.
What Types of Property Require a Survey?
All properties require a survey, whether new, old or newly refurbished.
A survey is not only necessary to check whether a property has any defects, other items may be identified in the course of a survey which require further investigation or specific enquiries to be made by your solicitor. Questions may include:
- If there have been any recent alterations to the property have these been carried out with Local Authority approvals?
- Are there any issues with trespass such as overhanging gutters or trees?
- Are there any asbestos containing materials (ACMs) within the property? These are not always obvious and may be in the form of textured coatings to ceilings and/or walls, floor tiles, etc.
- Has adequate fire protection been provided between the house and any attached/integral garage?
- Are there any flying and/or submerged freeholds? These may affect your buildings insurance.
- If you are purchasing a flat do you know whether there is adequate fire protection and means of escape?
- Are there any trees which may be within the zone of influence of the building?
- Are there any known issues in the area, such as subsidence, pitch fibre drains, etc?
The survey can either be carried out by the valuer at the same time as the mortgage valuation or you can instruct a surveyor of your choice to carry this out separately. You are able to instruct a surveyor who you think is most suited to carry out the task, this may be someone who is recommended by a friend, family, solicitor or anyone else. You are NOT under any obligation to have the survey carried out by the valuer who carries out the mortgage valuation. Remember to obtain written quotations on the cost of a survey.
To find a Chartered Surveyor in your area visit:
If you are buying a house in winter which is vacant there are a few extra items which need to be checked, particularly if the water has been turned off.
If you are buying a house in winter and it is occupied then the chances are that it is being heated (at least in part) and the service installations are being used. But if you are buying a house in winter which is vacant there are a few extra items which need to be checked, particularly if the water has been turned off and the heating system drained down.
If the water has been turned off you will not be able to check the water pressure, working order of the fittings, watertightness of pipework or be able to check whether the drains are flowing freely. Ask the selling agent to arrange for the vendor to turn the water on so that these items can be checked by specialists before you agree to purchase the property.
When the water is turned on, arrange for a heating contractor (contact a Gas Safe Registered contractor if the heating is gas) to inspect and test the heating and hot water system. Have its age and condition checked and make sure the boiler is a sufficient size to adequately heat the property.
If the house is damp, check whether this is simply condensation due to the house not being adequately heated and ventilated, or whether there is rising dampness or penetrating dampness. If there is rising dampness or penetrating dampness find out the specific cause/s of the dampness and deal with the defect/s. Some replastering may be required if plasterwork has been affected by salts. See also Buying a 1930s House. Consider instructing a Chartered Surveyor to report on any dampness and/or condensation issues. This can be checked as part of a detailed house survey. Visit RICS Find A Surveyor to find a surveyor in your area.
Check whether and drains or gullies have become blocked by leaves. Check whether gutters need clearing to avoid overflowing and/or rain penetration which may lead to dampness internally and staining externally.
See also Selling a house in winter.
An experienced surveyor will be able to use his or her knowledge and experience to assess whether there are likely to be any hidden defects which require further investigations.
Some buyers may wonder why their surveyor has asked for further investigations or a report from a specialist. Firstly, it is important to remember what the surveyor was instructed to do. Typically, a surveyor would carry out a single inspection. The property may be occupied, furnished, have floor coverings and in some cases there may be many stored items which hamper the inspection. In most cases a surveyor would not carry out any opening up to inspect hidden areas such as floor timbers, wall ties, etc (unless previously agreed and with the permission of the vendor).
Most properties will have some restrictions to the inspection including:
- Roof spaces without access hatches or with unsafe access, for instance where a roof hatch is positioned above a stairwell.
- Floor voids without access and floor timbers generally.
- Areas covered by furniture and/or floor coverings.
- Areas at high level, such as behind parapets, stacks, or simply not visible due to the roof configuration or height.
- Flat roofs to upper storeys, including bay roofs.
- Wall ties within cavities.
- Underground drainage runs.
Even though not all parts of a building may be visible, an experienced surveyor will be able to use his or her knowledge and experience to assess whether there are likely to be any hidden defects which require further investigations.
For instance, a surveyor will recognise the distinctive pattern of cracking associated with wall tie corrosion and may recommend that a sample of ties is checked using a borescope (instrument to view within a cavity).
Similarly, if movement is noted and there is a possibility of defective drains which may affect the property, the surveyor may recommend a CCTV survey to confirm the route and condition of the hidden drains.
Also, a surveyor may suspect rot and/or woodworm to a timber floor even without an inspection, particularly if there is springiness, dampness and/or a lack of ventilation. Further investigations may be recommended in the form of opening up, to establish the extent of defects and repairs needed.
In addition to further investigations, a surveyor may ask for one or more specialist reports, such as from an electrician, Gas Safe contractor or HETAS engineer. This is simply because these are specialist matters which need input from the appropriately trained and qualified specialist.
After reading your survey report, don’t feel inconvenienced if any further investigations or specialist reports are recommended. This is simply part of the process of finding out the true condition of the property you are thinking of buying so that you can proceed with the purchase in full knowledge of the condition.
Consider the findings of the survey against your expectations, taking into account your budget and how much work you are prepared to carry out.
Some people read their property survey report and think they should look for another property instead. It may sound as though an endless list of repairs are needed and that the property is far worse than anything else they could have chosen. While this is possible, in many cases the property may not be significantly worse than others in the area. It is a case of putting things into perspective.
If a property survey was commissioned on every similar property in the area the chances are that many would have issues to some degree. It is even possible that a survey on your present house may reveal some issues, even though you may not have been aware of them and these have not stopped you making the house your home.
It is important to remember that you have employed a surveyor to report on any items which may affect your decision to purchase the property or renegotiate the purchase price so that you can make an informed decision.
Highlight any major issues
A property survey report will always report some issues (I have never known one which hasn’t). Some may be major issues which require urgent or costly repairs, whereas others may be matters which can be dealt with over time and/or with insignificant cost. Read the report carefully and highlight any major issues.
If the report identifies any major repairs are needed (or may be needed depending on the results of further investigation or enquires) you should obtain cost estimates before you commit to purchase (usually exchange of contracts).
Most issues will fall into one of the following categories :
- Further investigations/enquires which should be carried out/made prior to commitment to purchase/exchange of contracts.
- Costly repairs which are urgent (these may or my not affect your decision to purchase, depending on your expectations and budget).
- Costly repairs which can be spread over time (again, these may or may not affect your decision to purchase depending on your budget and how much work you are prepared to carry out).
- Minor repairs/maintenance which can be dealt with after moving in (and should be anticipated for most properties).
The important thing is to consider the findings of the survey against your expectations, taking into account your budget and how much work you are prepared to carry out. The final decision can only be yours.
If you instruct a surveyor in a local practice you can be fairly sure that the survey will be carried out by someone with local experience.
Most prudent house purchasers will arrange a survey, but there are advantages in using a local surveyor when buying a house. Some surveyors cover a wide area and inspect properties in locations which vary considerably. However, if you instruct a surveyor in a local practice you can be fairly sure that the survey will be carried out by someone with local experience.
- Firstly, a surveyor who is already known to you or who has been personally recommended, either by a friend, family member or solicitor, is more likely to be a local surveyor. Most people would prefer to instruct a local surveyor when buying a house who has been recommended to them by a reliable person rather than someone who is not known to them.
- A local surveyor is more likely to be familiar with properties in the area, their form of construction, local materials and associated defects. A local surveyor may have inspected other houses in the same road, or possibly even the house you are considering purchasing.
- Local knowledge is important particularly for items which cannot be seen. For instance, a surveyor from another area may not be aware that a particular housing estate has pitch fibre drains. Sometimes the drains are not visible, eg, if a manhole cover has been concealed by paving or decking or is simply too heavy to lift. A local surveyor who has experience of inspecting other properties in the area will be able to warn of the possibility of pitch fibre drains where present in the area, and recommend further investigations prior to commitment to purchase to avoid unforeseen costly repairs at a later date.
- Similarly, a local surveyor is more likely to be aware of areas where black ash mortar has been used, which may sometimes not be visible, eg, behind rendering. It is important to know whether back ash mortar has been used as this can increase the risk of wall tie corrosion which requires costly repairs.
- A local surveyor is more likely to be aware of areas which may be affected by mining. Be aware that not all areas affected by mining will be obvious, particularly to someone who is not local. Some green rural areas and built up areas of cities, such as parts of Bristol, may have former mine workings, with no or few visible signs.
- Some surveyors from outside the area may not recognise ex-Local Authority properties which have been rebuilt. A local surveyor is more likely to have such knowledge and be aware of which properties are traditionally built and which are non-traditionally built. This is important as some non-traditional properties may be defective and not be mortgageable.
- Many purchasers view flood maps which show a potential risk of flooding, but a local surveyor is more likely to know whether a particular area has actually flooded in recent years or within living memory.
- Similarly, some searches indicate that properties in a certain postcode area have a higher risk of subsidence. A local surveyor is more likely to be aware of areas with a higher incidence of subsidence and is able to warn of the risk even if there are no visible signs.
For indication of the cost of a survey visit how much does a survey cost?
To find a local surveyor when buying a house visit RICS Find a Surveyor
If you are moving house and have found a cheap house, or one which is for sale for lower than you might expect, it is important to find out exactly why the vendor is prepared to sell for a low price.
When a property is marketed by an estate agent the asking price is pitched to generate interest from buyers but at the same time achieve the best price for the seller.
Many factors affect the value of a property, including size, location, condition, etc. Some properties may seem cheaper than other similar properties for obvious reasons. If you are buying what seems to be a cheap house, it is important to know why the seller is prepared to sell the property for a lower price than could otherwise be achieved. Reasons could include:
- It may be in poor condition and require costly repairs.
- It may be poorly presented, eg dirty or smell of tobacco or pets.
- The vendor needs to achieve a quick sale.
- Lack of parking.
- It may be located on a busy road or have difficult access.
- The area may be less desirable.
- Neighbouring properties may be less desirable.
- Neighbouring land use may have an adverse effect, eg, business premises which may generate noise.
Less obvious reasons may include:
- A defect which you are not aware of.
- A short lease.
- Restrictions on use of the property, eg, agricultural tie or for occupation by elderly residents, etc.
- Planning proposals for neighbouring properties or land which may affect the property either adversely or due to uncertainty.
- Difficulty in obtaining house insurance on normal terms, possibly due to a previous claim, eg, flooding, subsidence, etc.
- Lack of Planning Permission for all or part of the property.
- Lack of NHBC or similar certificate for a new property.
- Presence of mine shafts on or near the plot.
The above lists give an idea of factors to consider when buying what seems to be cheap house, but are not exhaustive.
If you are planning to buy a house which is seems cheaper than you would have expected it to be it is important to find out the reason why so that you are in full knowledge of the property you are buying and the area it is in so that you can make an informed decision about the purchase.
Some people consider having a survey before selling their own property as they think it might ease the sale process and prevent delays. The survey itself does not typically result in a delay in the house buying process so long as it is arranged in good time and not left until the last minute.
As long as the property you are selling is in a reasonable order, in most cases it shouldn’t be necessary to have a survey before selling your home.
When you have agreed an offer (or an offer “subject to survey”) your potential purchaser will choose whether or not to instruct a surveyor to carry out a survey (if your buyer is buying the property with a mortgage then a mortgage valuation may also be undertaken, either at the same time as the survey or separately).
Reasons not to have a survey before selling your property include:
- Most prudent purchasers would instruct a surveyor of their choice to carry out a survey on their behalf, irrespective of whether you have already had a survey carried out.
- If the buyer instructs a surveyor then the report will be prepared in their name and will be for them to rely on. If the seller has commissioned a survey then this would not typically be able to be relied upon by a third party, such as a potential purchaser. It may be possible to transfer the report into the name of the buyer but this may incur a fee.
- If the buyer has particular questions about the property, eg, if the buyer is considering carrying out alterations, these points can be addressed during the survey.
- If the seller arranges a survey before putting the house on the market and if there is a time lag between the survey being undertaken and finding a buyer, then the report may not be up to date.
In summary, wait to see whether your potential purchaser wishes to have a survey, and if so, leave them to instruct a surveyor of their choice. Allow the surveyor access to your property and be helpful with any questions he or she may have. So long as your buyer arranges a survey in good time the survey is unlikely to result in a delay.
The time to arrange a survey will fall somewhere within a band between agreeing an offer and exchanging contracts. First of all, remember that a lender’s valuation for mortgage purposes is not a survey.
If your decision to purchase depends on the condition of the house or flat then it is a good idea to arrange a survey in the early stages. This way, you can decide whether to proceed with the purchase at an early date and before your solicitor has completed their input. Many house buyers initially make an offer “subject to survey”. This way, the buyer makes it clear that the offer may be revised if the survey reveals that costly repairs are required.
A buyer who is relying on a mortgage to make the purchase should wait until the mortgage valuation has been carried out and have received a mortgage offer before instructing a surveyor (unless the valuation and survey are carried out at the same time, in which case the additional cost of the survey may be wasted if the property is valued lower than the purchase price and a mortgage offer is not received).
The most important date to consider before you should arrange a survey is the proposed date to exchange contracts. Once contracts have been exchanged, a buyer is committed to the purchase and there may be financial consequences if the buyer pulls out after this stage.
Remember to allow sufficient time for the survey to be arranged, undertaken and the report completed before exchange of contracts. Also, allow some time after receipt of the report to read the report carefully so that you are not rushed into making a decision. Bear in mind that the report may make recommendations for further investigations or to obtain cost estimates prior to commitment to purchase, ie, prior to exchange of contracts, so that you are fully aware of any terms which may require significant expenditure. And don’t forget to allow for busy periods and bank holidays, and check whether any parties, advisers, etc, have holidays or time off during the crucial period.
I’ve just received my survey report and the survey reveals defects. What are my options?
1. If your survey reveals defects, the first thing to do is get quotations from contractors for the works. Survey reports don’t generally include cost estimates because the actual costs can vary depending on whether any work is carried out in isolation or as part of a larger scheme. Make sure that you are fully aware of the cost of all works before exchange of contracts.
2. For most works it is better to choose your own contractor rather than letting the vendor arrange to have the work done. Most works can wait until after the purchase is complete. If you appoint a contractor yourself then you can make sure the works are completed to your satisfaction.
3. If the survey reveals defects which are significant and not reflected in the asking price, you may wish to renegotiate the purchase price. Renegotiation is usually done through the estate agent rather than directly with the vendor. Remember that the vendor is under no obligation to reduce the price. Any renegotiation will depend on how much the vendor can afford to reduce the price by. In some cases the asking price may take into account the condition of the property and there may not be any scope for renegotiation. Negotiation of the purchase price is a delicate balancing act and may not always go to plan. If there are other buyers on the scene then the vendor may choose to sell to another buyer. Similarly, a vendor may decide to take the property off the market if the likely selling price is less than anticipated.
4. You are not under any obligation to give a copy of the survey report to the vendor or even the estate agent. They may ask for a copy but the decision is yours. However, in some cases it may be helpful to give an extract to the estate agent to help negotiations.
5. If you find that the cost of the works is higher than your budget you may choose to withdraw and look for another property. This is only usually an option before exchange of contracts and this is a good reason to instruct a surveyor early in the house buying process.
In the event that you withdraw from the sale then the cost of the survey is a small price to pay when compared to any unexpected expenditure you would have had if you hadn’t commissioned a survey.
Obtaining a valuation when selling a house bought under the help to buy scheme.
When selling a house bought under the help to buy scheme (or repaying the loan in part or in full), Target HCA have specific requirements, one of which is to obtain a valuation.
The valuation must be carried out by a Chartered Surveyor (FRICS or MRICS), must be independent to an estate agent and must be someone who is not known to you.
The Valuer must inspect the property internally and externally. It is likely that the Valuer will also have questions to ask you such as whether the property is freehold or leasehold, the extent of the plot, whether there are any garages or parking spaces outside the plot, whether there are any shared drives/access ways, etc. The Valuer will also need to confirm the agreed purchase price.
The Valuer will research sales of comparable properties, making adjustments for any differences in size, location, changes in market conditions, etc.
The Valuer will prepare a report which will include a description of the property and its location. It will also include brief details of at least three comparable properties in the area which have sold (or are under offer). The report will set out the Valuer’s opinion on the value of the property based on the inspection and comparables.
Target HCA place a time limit of 3 months on the Valuation, therefore many homeowners choose to wait and instruct the Valuation when a sale has been agreed, rather than when the property is first offered for sale. If the sale of the house does not complete within the 3 month period then a further valuation will need to be obtained. Target HCA will accept a Desktop Valuation by the original Valuer provided certain criteria are met.
For further information visit http://www.myfirsthome.org.uk/
To find a suitably qualified Chartered Surveyor who carries out valuations in your area visit www.rics.org/uk
See also our home page for further information on buying and selling a house.
Source: Target HCA Customer Information Pack