A valuation survey is not a proper building survey
People often think that a mortgage lender’s valuation survey checks the condition of a property – but it doesn’t!
Mortgage valuations can give you a rough idea of whether you are paying too much (or too little!) for a property. A lender’s valuation is a limited check on a property to make sure it is worth the money they are lending. Or, to put it another way, it answers the question ‘Will we get our money back if we had to force a sale?’, which is different from the value of the house on the open market.
Mortgage valuations don’t take long – approximately 15–30 minutes. They do not go into anything more than superficial depth when considering the condition of the property. The mortgage valuation is for the benefit of the mortgage lender. It is designed to give enough information for the lender to decide whether the property is safe to lend on, and up to what amount. Though you may pay for the report, you may not get a copy or even see what the surveyor has written.
Mortgage valuation surveys are very limited in scope and are only likely to uncover obvious, visible defects as part of a brief inspection.
A home condition survey or full building survey can give protection by alerting you to potential problems before you buy. The result of an in-depth survey could lead you to back out of an unwise purchase, or give you the bargaining power to go in with a lower offer.
Market data shows that 80 per cent of buyers do not get a proper survey, but for those who do, the rewards can be great:
- 44% negotiated money off a sale
- 10% ensured a problem was corrected
- 25% said if they had known about a problem, they would have tried to negotiate a discount
- 10% said they wouldn’t have bought the property at all
- 25% felt that problems had been hidden from them
Generally, you will pay for a lender’s survey. The cost is based on the value and size of the property, and is typically £150 to £1,500. Sometimes, lenders offer mortgages with free valuation surveys.
If the property is valued below your offer price, you can either go back to the seller or the estate agent and offer a lower price based on the lender’s valuation, or dispute the valuation by providing evidence, if possible, of similar properties in the area selling for the same price or higher.
A third of people reported that they had missed a problem because it had not occurred to them to look!
Sellers don’t have to tell you about problems – common cover-ups include painting over damp, putting furniture in front of cracks, or rugs on top of floor problems... the list goes on.
The Property Misconceptions Act 1991 states that estate agents can’t be misleading, but they don’t have to reveal problems, either.
A building survey is vital as there are some problems you just can’t confirm for yourself. Even if you suspect damp or subsidence, only a surveyor can tell you for sure. Not having a more in-depth survey and relying on the mortgage valuation alone could prove to be a costly decision further down the line.
For the peace of mind that comes with a thorough building survey, contact us.
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