Should I have a survey before selling my house? 

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.

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When should I arrange a survey?

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.

 

buying and selling a house

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Survey reveals defects: what are my options?

Survey reveals defects

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.

 

buying and selling a house

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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.

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:

http://www.ricsfirms.com/

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Obtaining a valuation when selling a house bought under the Help to Buy Scheme

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

 

buying and selling a house

 

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How much does a survey cost? What affects the cost of a survey?

As a rough guide, the cost of a survey for most properties will fall within the range of £300 to £1,200, depending on type of property, type of survey, level of detail, experience of the surveyor, geographical location, whether a valuation and insurance rebuilding cost are included, etc.  For larger properties the fee could be anything upwards of this figure.  If a firm is VAT registered then VAT will be added to the surveyor’s fee and so you should check whether the fee quoted is inclusive or exclusive of VAT.

The cost of a survey will vary depending on a number of factors including:

  1. Size of property.  Clearly, a house with more rooms will take longer to inspect and this will affect the cost of a survey.
  2. Age of the property.  Many older properties have been the subject of alterations and improvements, some of which may be detrimental to the property.  Alterations give the surveyor more issues to consider during the course if the survey.
  3. Type of property, eg, house, flat, maisonette.
  4. Complexity of the property, eg, whether there are any extensions, whether any alterations have been carried out, whether there are any flying or submerged freeholds, etc. Typically, a surveyor carrying out a survey will ask the vendor about any alterations and other works which they have carried out.  However, some surveyors may simply report that a client ‘s solicitor should make enquiries on such matters.
  5. How detailed the report will be.  Survey reports vary considerably.   A surveyor who prepares a detailed report will clearly need to take more notes and photographs than a surveyor who merely reports “satisfactory” “in need of repair”, etc.

 

Survey with valuation and/or insurance rebuilding cost

A survey cost can vary if any additional services are required such as a valuation figure and/or insurance rebuilding cost. This will clearly affect the time input and therefore the cost of the report.

 

Cost of a survey when carried out by the mortgage valuer at the same time as the valuation

If you are taking out a mortgage then there may be an option to have a survey carried out at the same time as the mortgage valuation.  The mortgage lender will choose who carries out the valuation but remember that it is you, the buyer, who chooses who carries out the survey as this will be carried out on your behalf.  While this may be a cost effective way of having a survey, some purchasers prefer to have the survey carried out by a surveyor who has been recommended to them, eg, by family, friends or their solicitor.

 

Surveys on flats

Some purchasers are surprised at the cost of a survey on a flat.  Flats vary significantly.  A flat may be small, with, say, four rooms, but if it forms part of a large building then it is likely that the Surveyor will need to inspect the external parts of the block, or possibly other blocks on the site.  The terms of the lease must be checked before the survey is carried out, and all areas which the flat owner is either wholly or partly responsible for must be inspected.  This may include roof coverings, roof spaces, walls, drives, parking spaces, walls, etc.  In some cases a survey on a flat will take longer than a survey on a small house, and this is likely to be reflected in the price of the survey.

 

Obtain quotations

You can find names of Chartered Surveyors in your area by contacting the RICS Find a Surveyor facility on ://www.ricsfirms.com/

It is a good idea to forward the sales details for the property to a small number of Surveyors to obtain quotations.  When you obtain quotations for surveys, ask for sample reports so that you can compare the level of detail in addition to the price.  Also, ask who will be carrying out the survey and check that you are happy with their level of experience.  Remember that price is not the only factor in choosing a surveyor.

 

 

 

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Do I need a survey on a buy to let property?

Do I need a survey on a buy to let property?

In some ways it is even more important to have a survey on a buy to let property than one you plan to live in yourself.  If you live in a property yourself you will note whether any maintenance works need attending to.  If a property is let then you will be relying on the tenant to inform you if any works need attending to.  If you employ the services of a letting agent, while they may carry out periodic checks they may not be aware of repairs being required unless the tenant informs them.  Some tenants will bring any necessary repairs to your attention but others may not.  It is not a risk worth taking.

When instructing a surveyor to carry out a survey on a buy to let property it is a good idea to let them know that you plan to let the property rather than live there yourself.  This can then be considered during the inspection.

A survey should reveal whether anything needs attending to before a tenant moves into the property.  In most cases it will be necessary to carry out a test on the electrical installation and to service any gas appliances, such as boilers and gas fires.

The survey report will also let you know if there are any other potential hazards including:

  1. Dangerous wiring.
  2. Low level glazing and/or large panes of glass which are not safety glass.
  3. Large opening windows without opening restrictors.
  4. Windows to upper floors which do not allow escape or rescue in the event of a fire.
  5. Large gaps to balustrades.
  6. Lack of a handrail to staircases.
  7. Lack of smoke detectors.
  8. Infilled/capped chimneys or flues. A tenant must be aware that any disused chimneys/flues should not be used.
  9. Loose tiles.
  10. Inadequate fire door (or lack of a fire door) between the dwelling and any integral garage.

And finally, don’t forget to forward a copy of the report to your solicitor and to arrange buildings insurance.

 

buying and selling a house

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What should I do after having a survey?

What should I do after having a survey?

There is plenty of information and advice about having a survey before buying a property, but not so much advice about what to do after having a survey.  Remember that the purpose of a house survey is to identify any defects.  Even if a property is in a good order it would be unusual for no defects to be noted.  Any minor items can be dealt with once you have purchased the property.  However, if a survey report reveals that extensive works and/or investigations are needed then some purchasers may be unclear about the best way forward.

Firstly, you should forward a copy of the report to your solicitor as there may be items which your solicitor may need to check such as:

  • Ownership and responsibility of boundaries.
  • Ownership and responsibility of drains.
  • Ownership and responsibility of any shared drives/access ways.

Typically, a purchaser should obtain quotes from builders before commitment to purchase (normally exchange of contracts).  By doing this, the purchaser will be able to decide whether or not to proceed with the purchase in full knowledge of the level of expenditure required.

In some cases, a vendor might offer to arrange for minor repairs to be carried out before the sale of the property.  However, for most works, if you plan to proceed with the purchase it is better to wait and have the work carried out after completion of the sale.  By choosing your own contractor you will be in control of the quality of work carried out.  However, you should still obtain quotation/s before exchange of contracts.

Sometimes further investigations will be required, eg, if a defect is suspected but cannot be confirmed within the scope of the survey.  Opening up may  be required (with the vendor’s consent) or a specialist (such as a drainage contractor, wall tie contractor, etc,) may need to attend.

If the survey report recommends further investigations which are disruptive the vendor might not be willing to have these undertaken.  For example, if ground floors need to be taken up to inspect floor timbers to check for dampness and/or rot then this may involve moving large amounts of furniture and may damage carpets.  If this is the case, it is better for a buyer to budget for the worst case scenario, such as removal of ground floors, replacement with a solid concrete floor, etc.  The investigations can then be carried out after the sale has completed.  If the works required are found to be less extensive then a saving will be made.

If the cost of repairs is found to be significant, you may choose to speak to the selling agent to check whether the vendor may renegotiate the sale price.  If the vendor is keen to sell the property and if their financial position allows them to reduce the price, either in part or in whole, then the estate agent will negotiate to agree on a selling price.  However, the vendor is under no obligation to reduce the price.  In some situations a vendor may not be in a position to reduce the price, particularly if the vendor has a high mortgage or needs to sell at or close to the asking price to be able to buy their next house.

Above all, after having a survey, read the report carefully and read it more than once.  Highlight any important parts, obtain prices for any works and carry out any further investigations (if possible) before exchange of contracts.

 

buying and selling a house

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What affects the value of a property? 

There are several factors which may affect the value of a property.    Firstly, a mortgage valuation must not be confused with an estate agent’s valuation.  An estate agent’s “valuation” is a suggested figure to market a property to try to get the best price for the vendor, while at the same time being realistically pitched to obtain interest from potential buyers.  This figure can be adjusted during the marketing process, depending upon the level of interest.  This article deals with mortgage valuations rather than estate agent’s valuations.

A valuation for a mortgage is prepared to advise a lender whether a particular property is suitable security for an advance. It is typically carried out by a Chartered Surveyor who has experience in valuing that type of property in that particular area.  A valuer will look at details of comparable properties, check their sale prices, consider how long they were on the market, and make allowances for any differences and any changes in the market.  The valuation figure is arrived at after careful consideration and the valuer carries a high level of responsibility.

Factors which affect the value of a property include:

1. Location – A house in a sought after suburb will have a higher value than an identical house in a less desirable part of town due to a higher level of demand.

2. Size – In many cases a house with more bedrooms and other accommodation will have a higher value than a smaller property.  However, most house buyers are aware that some areas of their town offer “better value for money” than others and therefore size is not the only factor to affect the value of a property.  Size needs to be considered alongside a number of other factors.

3. Neighbouring properties/adverse land use – If a house is situated next to or close to something which a typical purchaser would find undesirable, this is likely to have an effect value.  This may include a property which has not been maintained and is unsightly, a business which generates noise, smell, a large amount of traffic, etc.

4. Condition – A valuer will take into account the condition of the property and the approximate cost of improving.  However, remember that the inspection for a mortgage valuation is not a survey.

5. Tenure – Tenure can also affect the value of a property.  Freehold flats often have a lower value than equivalent leasehold flats.  Some mortgage lenders do not lend on freehold flats and this affects saleability, and in turn, value. Also, a property with a short lease or any other onerous restrictions is likely to be less saleable, and therefore have a lower value, than a property with a longer lease and no onerous restrictions.

6. Parking – Most households have a car, and many have more than one.  A property with ample parking will be more desirable than a comparable property with no parking, particularly if street parking is restricted (possibly with the exception of some prime city centre locations).

7. Alterations without consent – If a property has been significantly altered or extended without the required Planning or Building Regulation approval then in some circumstances this may affect value, particularly if works have been carried out recently and enforcement may be required.  Also, alterations carried out without the required consents may be substandard, and possibly dangerous, eg, where electrical wiring has not been carried out by a competent electrician, and this may affect the value of a property.

See also: What can I do if my house is down valued?

 

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What a survey report will tell you (and not tell you)

A survey report will tell you the condition of a property at the time of the inspection. It is not a guarantee that no other defects will occur during your ownership.

A survey report will provide you with sufficient information (after carrying out any further investigations, etc) for you to decide whether or not to proceed with the purchase, or, whether to renegotiate the purchase price as a result of the findings of the report. It will not specifically tell you whether you should buy the property or not.

A survey report will tell you whether there is any evidence of settlement or subsidence to a property. It will not tell you whether any movement will or will not occur in the future.

A survey report will tell you whether there any are defects to the visible parts of the property. It will not tell you the condition of any hidden areas. However, if there is a reason to suspect defects to hidden areas, (e.g., damp walls at low level and lack of ventilation to a sub-floor void may cause dampness, rot and/or woodworm to hidden floor timbers) then the report should point out the risk and recommend further investigations are carried out before you exchange contracts.

A survey report will tell you the visible condition of the service installations. It does not include a test of service installations such as the electrical installation, heating system, drainage installation, plumbing installation, alarm system, etc. However, the survey report will recommend whether such installations require testing by specialist contractors.

A survey report will tell you whether any materials or products were noted during the course of the survey which may contain asbestos.  However, this will not be an Asbestos Survey and will not include taking samples to test for asbestos content.  An Abestos Survey and any testing of samples would need to be carried out by a specialist asbestos company.

 

See also instructing a surveyor,     what type of survey do I need? How much does a survey cost? and what should I do after having a survey?


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