subject: Home Buyers Survey: Investing In It Could Save You A Fortune [print this page] Forking out on an expert to survey the house is an unwelcome antidote to finding your dream home. Mortgage lenders, unfortunately, won't provide you with a loan unless you pay to have a basic valuation conducted, so it's in you interest to make sure that you know exactly the kind of products out there, and which is most appropriate for you.
Basic Valuation
A basic valuation (100-300) is a requirement for all mortgage lenders to determine that the money they are about to lend you does not exceed the value of the property. In other words, like any investment the bank wants to make sure that you will get at least the amount of money they are giving you back, should you come to sell the property in the future, and you are able to settle any debt left on the mortgage.
The thing you should be aware of is that a basic valuation, whilst perfectly fine for your mortgage lender, will only show up the obvious problems with a property, e.g. rising damp or a leaking roof. Nine times out of ten you will have noticed these problems yourself when viewing the property. The level of survey you require will ultimately depend on the type of property you are looking to purchase.
Home Buyers' Report
The Home Buyers' Report was brought into effect in the UK in 2009 and radically changed the way the survey was conducted. Using a traffic-light system, the report details the condition of particular features of the property, using non-jargonistic language.
Condition Rating 1 (green) - No repair is currently needed. The property must be maintained in the normal way.
Condition Rating 2 (amber) - Defects that need repairing or replacing but are not considered to be either serious or urgent. The property must be maintained in the normal way.
Condition Rating 3 (red) - Defects that are serious and/or need to be repaired, replaced or investigated urgently.
In particular, this report allows the surveyor to communicate his/her overall opinion on the property; provide pictorial evidence of any problems; and advise on whether the asking price is indicative of the property's true value.
Building Survey
The most comprehensive of the three reports, the Building Survey (~1000) is particularly important for properties which are older than 75 years; are constructed from non-brick materials (e.g. timber or thatch); or have had numerous extensions, or the purchaser plans to develop the property. The survey takes much longer than other reports since it covers everything in much more detail. Because of this, the turnaround time for the report is also lengthier, as surveyors are obliged by law to report on all of their findings. However, where faults are found (and there will be some), you should be provided with a breakdown of what needs to be done and how much it is likely to cost. So, as you can see this is a very wise choice for potential owners.
Now that you are familiar with the basic differences in the surveys available (there are more, specific surveys out there), you should think about the general condition of the property; what you intend to do with it; and whether you can afford to risk not spending a bit more on having your house properly checked out.
