Homebuyer's Survey: Don't Need One; Don't Want One -A Cautionary Tale.
Day 9: Everything You Need To Know About Buying and Selling a House or a Flat in 31 Daily Bite-Sized Chunks
Welcome to Day 9 of our special series of blog posts running every day in March - "Home Buyer's Survey: Don't Want One; Don't Need One-A Cautionary Tale
If you are one of the 4 out of 5 Homebuyers (actually 18% according to recent research by MORI and Which magazine)who do not have a full survey or a RICS Homebuyers Survey 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.
The Lender “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 two types of survey available, although a new survey product has been recently introduced known as a “Home Condition Survey”
Home Buyer’s Reports are specifically designed as an “economy” survey on residential property to fill the gap between the Mortgage Valuation Report and the Building Survey/Full Structural Survey.
A Home Condition Report is similar but includes Defects Insurance to a value of £20,000.
It is also useful to commission a Survey if you are buying out of your area.
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 mine were relocating because of a job move to the North West of England (they currently reside in Chipping Sodbury).
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 Homebuyers’ Survey) they instructed a local Surveyor to carry out a Homebuyers 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, it is 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 takes, 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 fact that the cost of a survey has ensured that they will not potentially lose tens of thousands of pounds has been money very well spent.
So always commission a survey, not only will it help identify problems and allow you to budget accordingly, according to The Which research, when a buyer commissioned a survey they were able to achieve an average reduction in the asking price of £2000.