What’s a home survey and why is it so valuable?
The homebuying process is often an emotional rollercoaster where the heart can sometimes rule the head. It’s easy to form a strong connection with a potential new property within a very short space of time, meaning there are times when the more practical side of buying a home is overtaken by an emotional attachment. This can be especially apparent when it comes potential works, value and other unforeseen issues surrounding the current state of the property. By this I mean things that might not be initially apparent such as the state of the roof, the age of the boiler, the electrics, its windows, drainage, planning permissions etc, etc.
This is where the complexity of a property transaction really starts in earnest, and an area which demands greater clarity. One of the most pressing questions which continues to arise once the purchase decision has been made concerns the valuation and the survey. Areas which continue to generate plenty of misconceptions. Late last year, a webinar poll conducted by Countrywide Surveying Services highlighted that four out of five consumers still confuse a mortgage valuation with a survey.
When asked the question – is the mortgage valuation still thought of as a survey? An overwhelming 80% of respondents believed this to be the case, with only 20% disagreeing with the statement. Despite mortgage surveys being a staple component within residential lending, they are often misunderstood and much maligned. This data, alongside regular anecdotal feedback we receive, indicates that there are still a worryingly large number of people relying on a mortgage valuation to uncover any issues with the property they are looking to purchase.
This highlights what a precarious position many buyers are leaving themselves in if they don’t source the right level of information or receive the right advice, especially if an unexpected and potentially expensive issue arises post-completion. This represents an education gap which needs to be addressed as early as possible in the homebuying process. After all, a survey is a vital component in helping to protect and generate valuable piece of mind for what is usually the largest financial decision that people will make over the course of their lifetimes.
So let’s clarify the difference between a mortgage valuation and a survey.
What is a mortgage valuation?
It’s advice given to banks and building societies by an RICS registered valuer to help them check the property is worth what people are planning to pay for it, and for them to decide whether or not to offer them a mortgage.
It’s important to remember that a mortgage lender’s valuation report is not a survey. It merely tells the lender whether or not the property offers reasonable security on the loan. A RICS survey will inform potential buyers on the actual condition of the property. That’s vital information that can be invaluable during price negotiations, and will also help them avoid expensive surprises after they’ve moved in.
Helping choose the right survey
Why do homebuyers need an RICS Home Survey? Because forewarned is forearmed. Choosing the right survey will help highlight any serious problems and advise them of the specific risks before they commit to the process of buying or selling a property.
Due to a lack of awareness around its importance, a survey can often be viewed as an additional cost rather than an integral one and the thing homebuyers need to bear in mind is that getting the right survey could actually save them time, money and heartache in the long run. And if you are in any doubt, always speak to a professional to find out more.
Matthew Cumber is managing director of Countrywide Surveying Services