When you work in and around property for a few years, one thing becomes pretty clear: as an industry, we are not great at explaining how things really work!
I know from my conversations with home buyers over the years that there is a huge amount of confusion about what mortgage companies actually do when they undertake a “valuation” or “valuation survey”. And, of course, the use of the word ‘survey’ in this context doesn’t help much, and so the confusion is understandable.
But the reality is that the “valuation” or “valuation survey” undertaken by your mortgage lender is not the same as a condition survey. Firstly, even though you will usually be required to pay for it, the valuation is for the lender’s benefit, not for your benefit as the purchaser.
Increasingly, lenders carry out what are called ‘desktop valuations’ – an assessment of the property based on a whole lot of data and algorithms, but not involving an actual visit to the property.
But even if the property is visited, the inspection is often very brief, sometimes completed in as little as 15 minutes, and therefore it really can’t be relied upon to identify issues with the property. At the end of the day, what the mortgage lender is concerned with doing is ensuring the property is suitable security for the loan they are providing. A property can actually be suitable security even if it has real problems, especially when lower loan-to-value ratios are involved.
And, of course, it’s not the lender who will be footing the bill if there are big repairs in store later, that will fall to you.
All of that being the case, it is important to ensure you understand what a valuation survey is and is not going to uncover. And the only way of ensuring you properly understand the condition of your prospective purchase is to commission you own independent condition survey.
A Level 2 or Level 3 condition survey will give you a clear picture of the property’s construction and any repairs or maintenance that might be required. Where defects are anything more than minor, the condition survey will provide you with the evidence you need to either ask the seller to fix the problems or, alternatively, you might prefer to renegotiate the price to reflect what has been discovered. And here’s another difference, because a mortgage valuation will seldom give you the detailed information that you need to be able to have this conversation with the vendors.
Even with properties that are in fairly good shape, a condition survey will mean you move in with a proper understanding of how your house is built and how best to look after it. That too saves money in the long run and can avoid expensive mistakes.
All in all, the value you get from a condition survey in terms of money saved, in both the short and long term, easily exceeds the cost of the survey itself.
So, don’t rely on a mortgage lender’s valuation to tell you about the condition of your prospective purchase. It’s not designed for that and it won’t give you the information you desperately need. Instead, commission your own condition survey. Buying a property is the biggest investment most people will ever make. Don’t do it with your eyes closed.
If you require a Level 2 or Level 3 condition survey then please Contact Me for a speedy, free, no obligation quotation (and no hard sell).
