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Not having your property surveyed could prove costly
Homebuyers in England and Wales are facing bills for thousands of pounds by failing to have a sufficient survey of their property before purchase, according to new research* from the Royal Institution of Chartered Surveyors (RICS). A quarter of all homebuyers who only had a mortgage valuation report had to make unplanned building works to their property after purchase.
On average, the bill for these works, such as damp proofing or repairing a roof, came to £1,818 – but the cost can be much higher.
Home surveys help buyers make informed decisions on whether to go ahead with buying a property, before legally committing themselves. Despite their importance, many buyers remain confused about surveys.
A mortgage valuation report is often wrongly assumed to be a building survey. Actually, it is purely an indication of the property’s value for loan purposes, prepared for the lender, not the purchaser. Most importantly, it won’t uncover any potential problems.
A survey can help purchasers to avoid all sorts of unexpected costs
However, when questioned, 58 per cent of respondents wrongly believed a valuation report included the building’s condition, including searching for damp and structural movement. A further 31 per cent were mistakenly under the impression it included advice on any legal issues a solicitor should investigate.
An inspection and report
Even if you are paying for a mortgage valuation report, RICS still recommends you arrange a survey with your own surveyor. There are two options available:
an RICS Homebuyer Report, which provides an inspection and report on the property’s condition, plus a valuation.
A building survey is more detailed, and may be the best option if the property is in a bad state of repair, has been significantly altered, or if you are planning a major conversion or renovation.
David Dalby, RICS Residential Director, added: “In difficult economic times like this it makes sense to ensure you are getting the best possible value when purchasing a property. No one wants to find a nasty surprise down the line, or pay over the odds for a property that needs lots of work. A survey not only gives you a price valuation, but also a detailed report of the state of the property. Armed with this information you are in a much stronger position to decide whether to proceed with the purchase, or negotiate a better deal.”
To help homebuyers in England and Wales navigate the survey market, RICS has prepared some helpful tips:
Ask an expert: Your mortgage company or IFA will offer you advice on your finances, but it is a chartered surveyor who can offer you professional advice on the property itself. Before you commit yourself legally your surveyor will advise you on what is a reasonable price to pay for the property and flag any serious defects or risks with the property.
Spend a little to save a lot: The old adage a ‘stitch in time saves nine’ couldn’t be truer when it comes to property. By spending a small amount extra on a survey you could be saving yourself thousands. A HomeBuyer Report costs just a few hundred pounds, a small amount extra on top of a valuation report, on average £350 – a small amount to help uncover any unpleasant or costly surprises. A building survey is more detailed and therefore more expensive.
Use your survey to help negotiate a better deal
Seventy six per cent of those questioned agreed that a more comprehensive survey could potentially allow you to negotiate a better deal with the seller. A chartered surveyor adds: “My client had already had mortgage valuation, which didn’t raise any issues. However, the HomeBuyer Report I carried out found lintels missing over window openings, laminating roof tiles, blocked drains, and rising damp. The fee to repair these problems could have cost £2,000 – a sum the client negotiated off the cost of the house.”
RICS is the world’s leading qualification when it comes to professional standards in land, property and construction.
In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism.
Over 100 000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members.
RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice on key issues affecting businesses and society. RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.
For more information, contact RICS via the website: www.rics.org