Gardner Leader

Property Surveys reduces risk

Stuart Durrant, Conveyancing Partner at Gardner Leader LLP, is surprised that nearly 80 per cent of homebuyers still do not bother to obtain a professional survey when purchasing their new home. The risks in not doing so can be enormous.

Fairly often a client will call me after I have completed the purchase of their new home to tell me that they have found say rotting floor boards or structural problems. At this point I will ask, “What did your survey say about this?” to which the client will reply, “Well I got a valuation”. I will then explain that this is not the same thing and that the tired Latin maxim ‘caveat emptor’ (let the buyer beware) applied to their purchase.

They are now stuck with remedying the problem themselves without any recourse to the seller or any surveyor had they instructed one.

For most people, buying a house is the most expensive purchase of a lifetime and it is essential to get it thoroughly examined beforehand.

Ok, it is going to cost to get a survey, but the amount of money, time and hassle it could save in the future by highlighting any major flaws is surely worth the added expense.

There are two main types of survey:

·          Homebuyer's Report and

·          Building Survey.

Homebuyer’s Report

This is in an agreed format set out by the Royal Institute of Chartered Surveyors. It includes all major sections of the property that are clearly visible to the surveyor. The aim of this survey is to provide a snapshot of what the overall condition of the property is, and to identify which areas are in need of further tests or more specific investigation. Wiring, drainage and gas are not included in the survey. This survey is most suitable for conventional properties that are in a reasonable condition, have been built within the last 150 years, and are less than 2000 square feet. It is cheaper than a Building Survey, but is not suitable for unusual properties, ones that are particularly old, or if you are planning on renovating the house.

The main details of the Report will include:

• Looking at the general condition of the property and assessing its major and minor faults.
• Assessing whether any of the major faults will need repairing, and the cost implications of these.
• Assessing and reporting damp in the walls and woodwork, and any woodworm.
• Assessing the condition of damp-proofing, insulation and drainage (although drainage will not be tested).
• Providing an estimated cost for rebuilding should the property be destroyed. This is usually for building insurance purposes.
• Recommendations for any further surveys and investigations that may need to be performed on specialist areas before the contracts should be exchanged.
• Providing a valuation, based on the surveyor's expertise and experience, of the property on the open market.

Building Survey

These surveys are much more detailed, and provide a comprehensive report about the current condition of the property. This type of survey is the most thorough one available, and will examine all accessible parts of the property. If you wish to have any specific areas looked at, this type of survey is the right choice.

The Building Survey is suitable for all types of property, whether they are listed, unusual or old, whether you wish to perform renovation work on them or whether the property has already had extensions added to it. This means that this survey is preferred for all buildings which cannot be included in the Homebuyer’s Report, largely because it is more expensive.

Valuation

When you apply for a mortgage, the lender will require you to carry out a mortgage valuation on the property. This acts as a kind of collateral for the mortgage provider to make sure that the property is worth the value which you are proposing to buy it for, i.e. what the mortgage provider is lending you.  Some lenders will not charge for this to be done, as an incentive to try and persuade you to take out the mortgage with them, otherwise the cost of the survey will depend on the size and purchase price of the property.

This valuation is not an extensive survey and will not provide accurate details about the condition of the property eg. major structural problems which could cost a great deal of money to rectify. The valuation also does not guarantee that the property is worth the asking price.

In summary, please get a survey. It should always be carried out before exchange of contracts. It may make you decide that you do not want to purchase the property after all, it may give you a legitimate reason for renegotiating the price, but most importantly it will give you an informed and objective opinion on what you are buying.

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