As your Estate Agent in Lytham St Annes and The Fylde we are here to provide you with as much information as possible to help you buy or sell your house. Please browse our glossary of terms and if there is anything else you wish to ask please call us on 01253 796996.
There can be confusion over the difference between a survey and a valuation (discussed below), and between the different types and purposes of surveys. Strictly speaking, the word "survey" means no more than a look at a property by a professional person for a specific purpose - which could be to appraise its basic value as security for mortgage purposes or to assess the dilapidations schedule at the expiry of a full repairing lease.
These days prospective buyers are usually sent a copy of the valuation report but one should not place too much faith in this superficial type of survey. It may have been subject to a thorough inspection by a qualified surveyor who would have commented on any real problems but that is not necessarily the case.
This type of report has a single purpose: to confirm to the lender that it would not be ill-advised if they were to advance the requested loan secured by a charge against the title to the property. If there is a major defect - which, unrepaired, would significantly reduce the resale value - the surveyor should have drawn this to the attention of the lender as their client.
Of course, where a particular defect is significant, the valuer may recommend a reduced offer, suggest a retention from the advance, or even turn the property down completely. Remember that the report was commissioned by the lender and accordingly it is not a warranty or guarantee. Most important, you should not rely on it fully as indicating that nothing else is remiss with the property in question.
A full Structural Survey is a more involved and detailed investigation which will have been carried out by a qualified surveyor who will then report in detail on the condition of most aspects of the property. Any matters not covered, for example, the drains, the heating system or whatever, will have been noted in the report, usually with recommendations for contacting a specialist contractor. In the case of a big old house or converted flats it may be imperative to have such a detailed survey carried out, but it will be a relatively costly undertaking.
You must also bear in mind that the surveyor will have tried to make reference to every existing fault - and any potential fault - which has come to his attention. Consequently, his report may well sound like quite a catalogue overall, so it is particularly important that you understand the implications of what is said. We do recommend that you read the report carefully, and maybe talk to your solicitor, to avoid jumping to hasty conclusions.
If a survey does show up a major and unexpected fault, then we may be able to arrange for an adjustment in the price, or for the seller to assist with the cost of the remedial work. Either way it is not the end of the world - there are very few properties which could pass a full structural survey unscathed and clean.
Incidentally, the Royal Institution of Chartered Surveyors and the Construction Industry Council argue that the term "structural survey" can be misleading and have tried to define various building inspections and surveys very precisely. They have found that the same titles sometimes identify different services on a localised basis and this can confuse people moving from one part of the country to another.
Some "structural surveys" would include a valuation, while others prepared by a structural engineer, for example, may only cover the load-bearing elements and would not be expected to involve more superficial issues.
Accordingly, these professional bodies recommended that the term "structural survey" is replaced with "building survey" and stress that it is in everybody's interests to have the conditions of engagement, with a definition of the brief and the extent of the inspection to be undertaken, agreed in writing at the outset.
A Building Survey is therefore an investigation and assessment of the construction and condition of a building which will not normally include advice on value. This may be carried out by a chartered surveyor or structural engineer and will generally include details of the structure, fabric, finishes and grounds. The exposure and testing of services are not usually covered.
The extent of the survey should be subject to specific agreement with the client with advice on the cost of repairs being subject to such agreement. The report will include reference to visible defects and guidance on appropriate maintenance and remedial measures.
The report may still recommend that specialist and elemental investigations are undertaken or other specialist advice obtained relating to specific issues.
Because of the time, cost and professional responsibility involved in producing a structural or building survey, they are expensive. There is, however, a more limited form of house buyer's survey which is widely available. These "Home Buyer's Reports" are prepared on a standardised basis and are intended as a mid-way option between a valuation and a full building survey. The pro-forma cost is related to the price of the property while the report itself includes a number of strong explanation and exclusion clauses. The latest version also includes recommendations for repair works graded according to their importance and urgency.
For straightforward properties where the client requires no out-of-the-ordinary advice, these reports in a standard format and under the relevant standard conditions of engagement are proving popular although minor items of disrepair which do not materially affect the value will not normally be reported. Whether services will be tested or not will be agreed between the parties beforehand.
Finally, the question comes down to whether one should have a separate survey, or rely on the valuer's report to the lending authority. Generally speaking, with a modern property there should be nothing major which is not apparent on close inspection. On the other hand, if you are particularly concerned about an older property or a worrying feature of a more modern property and really feel it is worth spending money to be fully informed and reassured about the condition, then we can give you a list of reputable local surveyors that you may care to approach. Obviously, we are not in a position to offer this service ourselves if you are buying one of the many properties we are offering for sale.
A valuation is not, strictly speaking, a survey although it may be carried out in association with a survey, or by a surveyor, as explained earlier. Under present legislation building societies are still required to have property professionally valued but the latest mortgage banks are less strictly regulated and may soon be able to make an adequate appraisal by checking electronically against a data base of comparable properties.
Before most banks and all building societies can lend money to help you purchase property, they will want to have a valuation carried out by a competent professional person. Usually this valuation will come in fairly close to the market price of the property, but just occasionally the surveyor will have been asked to report on property outside his normal area or experience resulting in a more conservative judgement. This is only likely to be critical if you are seeking a full 90%, 95% or maybe 100% mortgage. Please talk to us if you have any doubt about it; your solicitor will be able to explain the implications and position more fully.
Since we sell a lot of property and have one of the largest registers of property in the area, it follows that we will have a very clear idea of current market trends. In the unlikely event of there being a major difference between this valuation figure and the price you have agreed to pay, do please talk to us for there is probably a simple explanation or a misunderstanding which we can help to correct.
If buying a new property, offered complete with carpets and many other fitments, then the valuation may include a discount for these extras - and relate merely to the bricks and mortar which is the main investment you are buying. Legally these white goods cannot be covered by the mortgage charge.
Please remember that the primary purpose of a valuation is to provide an opinion of the price a property might achieve if it were sold, while other types of survey and inspection (discussed above) may focus on condition, constructional issues and associated remedies.
A valuation inspection normally precedes a valuation, which advises on the value of a legal interest in property.
Of course valuations may also be made for a variety of other reasons. Three issues need to be understood and pre-agreed between the parties before the valuation is carried out: the purpose and date for which the valuation is required; the extent and tenure of the property to be valued; and the specific assumptions on which the valuation will be made. A valuation inspection should then take account of relevant factors affecting condition, location and aspects of construction which are readily observable on a walk-around inspection.
With a simple property valuation the professional is not under any contractual duty to advise in detail over defects or as to their remedy. Neither will they be obliged to uncover, open-up or investigate individual features of a property.
Finally, a valuation should not be interpreted as, or used in substitution for, a survey report. Generally, the scope of a valuation inspection, and any measurements taken, will be confined to what is necessary to establish aspects and factors material to value.