How important is it to have a homebuyer's survey when you buy your new house or flat.
Chapter 9 from our home buying and selling guide "Don't even think about buying or selling your home until you've read this book -it will save you time & could save you thousands" deals with what type of surveys are available and a cautionary tale to boot.
We have used all our experience as top notch, quality solicitors in Chipping Sodbury, Bristol to bring to you a definitive guide to buying and selling your home.
Over the next month post or so we will post a Chapter from the book every other day.
But, if you can't bear the suspense, follow the link at the end of this post and receive a complimentary copy.
If you are one of the 4 out of 5 Homebuyer’s (actually 18% according to recent research by MORI and Which magazine) who do not have a full survey or a RICS Homebuyer’s Report and Valuation carried out on their new home - think again!
Many excuses are used for failing to carry out a survey; cost;extensive local knowledge; age of the property, old and new and most popular of all- our Lender will carry out the survey.
But, the Lenders' “survey” is actually not a survey at all and is merely a valuation of the property to ensure the Lender is not lending too much on the property.
A common excuse is to believe that a new house built within the last ten years has a NHBC guarantee. This is somewhat misleading as there is no such thing as a NHBC guarantee, merely a warranty.
The warranty is really only effective, unless in extreme cases,for the first two years after the property was built.
What types of Survey are available?
There are now three types of survey available, as a new survey product was launched in 2011 by Royal Institute of Chartered Surveyors (RICS)
1. RICS Home Condition Report
A RICS Condition report gives you clear "traffic light" ratings showing the condition of the property, advice for your legal advisers and details of urgent defects.
2. A RICS HomeBuyer Report (HBR)
A RICS HBR gives you all of the above, plus a separate market valuation and insurance reinstatement costs, and advice
on defects that may affect the value of the property. The HBR also recommends necessary repairs and ongoing maintenance advice.
3. Building Survey
A Building Survey gives you a comprehensive structural report tailored to suit your property, highlighting defects, repairs and maintenance options. Essential for larger or older properties or if you're planning major works.
Here is a cautionary tale about buying a property, not in your area, where you have little knowledge of property or the surrounding area.
Clients of ours were relocating because of a job move to the North West of England.
They did a bit of detective work and scouted various locations, and eventually found a property overlooking a park at a good price but in need of modernisation.
By taking our advice (we always advise clients to have at least a Homebuyer Survey) they instructed a local Surveyor to carry out a Homebuyer Survey.
Most of the recommendations were not a surprise given the state of the property.
It was the final summary which took our clients’ breath away, and it was information that without the Surveyors local knowledge of the area, would not have been easily available to them.
The Surveyor concluded:
“While the property is located in an enclave of prestigious houses overlooking a park, we would point out that within 200 metres of the property, itis possible to buy a terraced house for as little as forty thousand pounds."
This could severely affect the long term value of the house and much depends on the immediate adjacent area, as to whether it will prove to be a good investment.”
Although, my clients would have happily endured the renovation of the property, the uncertainty of a potential reduction in the value of the property, through circumstances beyond their control, was an unacceptable risk.
It would remain to be seen whether my clients would have lost money. But for them the extra cost of a survey ensured that they avoided the potential loss of thousands of pounds.
So always commission a survey, not only will it help identify problems and allow you to budget.
According to ‘Which’ research, when a buyer commissioned a survey they were able to achieve an average reduction in the asking price