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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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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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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What can I do if my house is down valued?

Down valuation is when a property is valued by a mortgage valuer at a lower figure than the agreed purchase price. It does not mean that the valuation is too low.

 

When a house is down valued, this can cause frustration to a buyer and problems in a chain.  This article will explain what down valuation is, the reasons why a property may be down valued and suggests paths a buyer may consider if the house they plan to buy has been down valued.

 

What is down valuation?

Down valuation is when a property is valued by a mortgage valuer at a lower figure than the agreed purchase price.  If a house is down valued it does not mean that the valuation is too low.

 

Reasons why a house is down valued

A property isn’t strictly “down valued”, it is more accurate to say that it has been “valued” by the mortgage valuer, but the valuation figure just happens to be lower than the agreed purchase price.

The valuer will arrive at the valuation figure “Market Value” after considering the actual sale prices of several similar properties in the area.  Sometimes there may be recent sales of a number of similar properties, for instance for a house on a large housing estate.  Other properties may be more difficult to value, particularly if there is nothing similar in the area.  However, the valuer will still look at the actual sale prices of other properties in the area and make adjustments for size, condition, saleability and desirability of a property, the date previous sales took place and any other relevant factors.  The mortgage valuation would generally be prepared by a valuer with experience of valuing properties in the area. The valuer’s decision will not be made lightly as there may be consequences if a house is valued negligently.

 

Problems which can occur when a house is down valued

One of the most common problems a buyer might experience during the house buying process is down valuation.  Often a buyer is unable to proceed without the required funding from the mortgage lender.  Also, a lower valuation by the mortgage valuer may alert the buyer to the possibility that they may have agreed a purchase price that is too high.  Either of these factors may result in a buyer not proceeding with the purchase, which may in turn lead to a chain falling through.

 

Steps to take if a house is down valued

If a buyer is unable to proceed without the anticipated funding from the mortgage valuer, a buyer could pull out from the sale and look for another property, or they could try to negotiate a lower purchase price.  However, the seller is under no obligation to agree to a reduced selling price, and it is possible that the seller may not be in a position to reduce the price particularly if they have a high mortgage or need the funds to purchase another property.  If a buyer tries to negotiate a lower price and if there are other potential purchasers who are in a position to proceed, eg, a purchaser who does not require a mortgage, or a smaller mortgage, the seller may decide to sell the property to one of the other buyers.  This is a risk the buyer must consider.

If a buyer discovers the agreed purchase price is too high, they may choose to withdraw from the sale.  Many buyers consider this to be a nuisance but in many cases the abortive cost of the valuation will outweigh the benefit of paying too much for a property.

In a situation where a buyer wishes to purchase a property for a particular reason, for instance the property is close to family, a preferred school, or the property may be in an area where houses rarely come onto the market, then the buyer can still purchase the property, they simply need to find the shortfall in funding, eg, from savings or money put to one side for improvements.  The buyer may decide to still buy the house even if it means making sacrifices such as making do with the old kitchen or bathroom fittings instead of replacing them straight away.

While down valuation is viewed as a problem by many people during the house buying and selling process, it is sometimes an issue which can be resolved.

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