Did you know that 80% of house buyers choose to rely on the property valuation provided for their lender rather than commissioning an independent Home Buyer or Building Survey. By having your property surveyed, you will know exactly what state the property is in as well as any hidden costs that may result in repairs required that the untrained eye could easily miss. By relying simply on the property valuation you could be gambling with probably the largest purchase you will ever make!
There are actually three main types of property surveys available for you to choose from:
Mortgage Valuation Report
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Mortgage Valuation Report. Until this has been carried out property buyers will not be allowed to take out a mortgage for a house or a property. A property valuation will, as the name suggests, ascertain whether a property is worth the price to be paid and therefore covers the amount to be borrowed and in essence allows the lender to ensure that if anything does go wrong, the value of the property will be sufficient to enable them to get back the money they've lent. Remember, this basic valuation is carried out for the lender and not necessarily of benefit to you.
HomeBuyer Report
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The second survey or house valuation is the Home Buyer Report which is the next level up from a simple Property Valuation. It differs in that it also examines the basic condition, fabric and general state of repair of the property, which is extremely important when buying a house as it will indicate any further expenditure required on maintenance and repairs and thus is a worthwhile survey. It follows a simple to understand RICs approved format and will provide a simple Property Valuation towards the end of the report
Full Structural Survey
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The ultimate survey is the Full Structural Survey. This is an extremely thorough survey and therefore tends to be a lot more expensive. If the property is badly in need of repair or is very old it really is important to commission a full structural survey in addition to the property valuation.
Consider whether you wish to proceed with the sale
For most properties, the house valuation will not reveal any major or extensive problems. However, when problems are revealed, which is less likely to be the case with a standard property valuation rather in one of the buyer focused surveys, this would be the moment to consider whether you wish to proceed with the sale. If the decision is to proceed purchasing the property, a reduction in the price that reflects the cost of repairs that must be carried out would be an acceptable request.
Buying a property or a house that comes with a lot of problems is a decision not to be taken lightly, remember that it may be expensive to rectify the problems so make sure that you have the money!
Your lender may demand that as result of the property valuation some work will need to be carried out immediately as a condition of the loan. As a result some lenders may well retain part of the sum they have agreed to lend you until specified work or repairs have been completed. Once this is done, the lender will release the rest of the money, however, in the meantime it will be up to you to finance the repairs or work.