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  • I’ve Had A Mortgage Valuation - That’s Enough?

    16th November 2017

    I’ve had a mortgage valuation – that’s enough?

    Definition:

    Mortgage valuation: ensures your prospective lenders that the property you are buying is worth the amount of money they are parting with.

    This is important because it is focussed on giving your lender the confidence that the amount they are lending is safe… your deposit isn’t their worry.

    Most people think that it is a full structural survey because it costs so much, however a mortgage valuation survey is not a structural survey.

     

    Question: Will I see the mortgage valuation report?

    Although the valuation is usually paid for by you, mortgage lenders do not always share the details of the survey with you, just the value that they are willing to lend. This is because the RICS surveyor is working for the lender, not you.

      

    Question: How long does the mortgage valuation report take?

    Not long – usually between 20-30 minutes to cover all the reports details for the 2-3 page report. A HomeBuyer Report or Building Survey takes around 1.5 – 2 hours (longer on more complex properties) with a much longer and more detailed report.

     

    Question: Does a mortgage valuation report on defects?

    You cannot rely on it to do so for your needs as a buyer. If the RICS surveyor carrying out the valuation feels further investigations they will tell your mortgage lender. But, they do not give you a report of the potential defects. The level of detail regarding defects is limited to comments regarding the overall condition.

     

    Question: Surely the property is fine if it looks ok?

    Who knows? Property maintenance is not most sellers key concern. Most people tend to do reactive maintenance not proactive. This means there is probably a lot of hidden upkeep that is required and a survey will help you plan and budget after you’ve moved in. If you’re pushing your deposit and mortgage payments to your limits for your dream house you don’t want any surprises down the line.

     

    Question: Do I need a Homebuyers Report or Building Survey as well as my Mortgage Valuation?

    Yes, we would recommend one.

    Why? Your mortgage lender instructs a surveyor to carry out your mortgage valuation for their needs, not yours. The surveyors duty of care is with the lender, again, not you.

    It is your responsibility as a buyer to make sure you are happy with what you are buying. Although the seller should tell you about any problems they are aware of, it isn’t in their interest to highlight them and it is very hard to prove they knew about an issue after moving in. This means properties are basically ‘sold as seen’ in England (or caveat emptor in Latin – buyer beware). If you buy a property with issues (subsidence, wood rot, asbestos, damp to name just a few) it is your cost to fix. You have no claim over the seller unless you can prove that they were fully aware and failed to disclose this information. Even if you can, it is a long, expensive and frustrating process. A survey ensures you know what your immediate and future liabilities are likely to be and saves lots of hassle down the line. 

    When you instruct your own RICS surveyor the contract will be between you and the surveyor. They are working for your benefit to find any visible or potential defects that fall with the wider scope of their survey. A surveyor inspects properties full time. They know what to look out for, where issues are likely to be hidden and how to put the pieces of the jigsaw together to advise you in the best way.

     

    Conclusion:

    In essence – it is not a structural survey and doesn’t give you information on the condition of the property. This information is key for two reasons. Firstly, it is invaluable during price negotiations and helps avoid expensive surprises down the line. Secondly, it allows you to plan ahead and budget for ongoing maintenance that will be required to keep the property in top condition and market value.

    Mortgage valuations are not as detailed and thorough as the homebuyer report and a building survey and it is advised to get a more detailed survey.

    Whilst these surveys are more expensive than mortgage valuations, the cost relative to the investment you are making is negligible and keeps you in a much safer financial position. You would check out product reviews for cheap items you buy online – make sure you get a review for your new home too.

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