|
|
|
| |
| |
|
|
SURVEY / VALUATION FEE
Since the Building Societies Act 1986, building societies are required to arrange a report and valuation of every property on which a new advance is made. Whilst lenders other than building societies are not legally required to arrange valuations, they all insist on them.
A survey fee is charged for such a valuation. The survey fee is, therefore, another cost that will usually be paid with the mortgage application. The valuation offers some benefits to both the lender and the borrower in giving a professional opinion as to the market value of the property and security for the loan.
A qualified valuer has a duty of care and a contractual liability to provide an accurate valuation.
The lender wants to know of any defects that may affect the property's marketability. The inspection may also reveal other aspects, such as undeclared occupants, or a suspicious connection between the vendor and the purchaser.
The borrower is also concerned with the market valuation of the property and any major defects it may have. Some of the surveyor`s findings may enable the purchaser to renegotiate the price.
The surveyor is either a staff valuer, working in the direct employ of the lender, or a panel valuer. Most lenders operate a panel system, whereby local valuation firms are requested to perform the survey.
There are three main types of survey available. These vary in depth of information and, therefore, in cost:
Basic Mortgage Valuation
A basic valuation costs the least of all surveys because it is the most basic. Normally, a mortgage lender will insist you have this survey because it gives them basic information about the value of the property. It will advise them about some basic conditions of the property (e.g. what type of construction it is, what type of roads service the property). This type of survey should cost between ã100 to ã500 depending on the property value.
Report and Valuation (Homebuyers Report)
The RICS homebuyer report is in a standard format and is designed specifically as an economical survey and is a cost-effective way to minimise risk. The homebuyer report focuses on essentials: defects and problems that are urgent or significant and will affect the value of the property.
The homebuyer report, unlike a building survey, provides not only a survey but also a valuation as an integral part of the service.
This type of report is much more detailed than the basic mortgage valuation, which most people choose to commission, and is normally instructed by house/flat buyers for their own use giving them a direct link with their own Chartered Surveyor. The surveyor`s main objectives in providing the service are to give guidance on value and to assist the prospective homebuyer to:
-
Make a reasoned and informed judgement on whether or not to proceed with the purchase
-
Assess at what price it would be reasonable to purchase the property
-
Be clear what decisions and actions should be taken before making an offer to purchase
The surveyor will also give a professional opinion about the particular features of the property that affect its present value and may affect its future re-sale. The report format is standard, compact, and easy to understand. It covers the building inside and outside, the services and the site. It focuses on the defects and other problems that the surveyor judges to be urgent or significant. It also covers:
-
General condition and particular features
-
Particular points which should be referred to your legal advisors
-
Other relevant considerations concerning, for example, safety, location or perhaps insurance
Matters not judged to be significant are generally not included in the report, but where necessary, the surveyor may also provide some extra service which is considered outside the scope of the standard package - perhaps for a schedule of minor defects (for later discussion with a contractor).
Internally, the condition of service installations, such as wiring and drainage and central heating, will also be examined but not tested.
Structural Survey
The building survey used to be called a structural survey and it is the most detailed of the three reports. There is no standard form, but all surveyors have developed their own detailed report format.
The surveyor will examine and report on chimney pots and stacks, the roof cover, soffits and fascias, gutters and downpipes and look at all external walls to see if there is any current evidence of settlement or subsidence.
The surveyor will examine windows and external timbers and endeavour to identify a damp proof course. He will lift inspection chambers to examine the drain runs, advising on the necessity or otherwise of a drains test if there is visual evidence within the inspection chamber or around it , or on the building, of drainage problems.
The surveyor will also examine the site, identifying any visually apparent problems with the boundaries. He will also advise if he considers that trees represent a threat to the stability of the building. Inaccessible roof surfaces are examined from the ground with the aid of binoculars. Inside the property, the surveyor will go into the loft, if access is available, to inspect the structure of the roof, the insulation, any water installation and examine chimney stacks, checking that there is adequate support. The composition of ceilings may be noted together with the condition of any wiring found within the loft.
The surveyor will then examine the underside of the ceilings and check for signs of movement which may indicate roof spread and then inspect all internal walls to see if there are any signs of settlement or subsidence. The surveyor may recommend immediate remedial action, or monitoring of cracks within internal and external walls.
A damp test will be carried out to accessible ground floor areas. This can give an indication of whether sub-floor timbers are at risk from dry or wet rot problems.
The surveyor will then inspect timbers, plumbing, electrics and heating. If there are obvious problems here, he may recommend specialist reports.
The report may result in a schedule of repairs on a separate page that you could give to a building contractor to obtain a quotation for any works that need to be carried out before you exchange contracts on the property.
The building survey can include a valuation on the property and a reinstatement value (what it would cost to build the property from scratch in the event of say, a fire). The surveyor will confirm exactly what is and what is not covered under a building survey by confirmation letter when you ask for a quotation.
|
| [Back to top] |
| |
|
|
|
|
|
|
