Conveyancing Explained

July 11, 2008

The Valuation Report

When buying a house with a mortgage, this report is obtained by the mortgage lender. A valuer will visit the property to give a basic opinion to the lender as to whether or not it is sufficient security for the loan you have applied for i.e. whether on consideration of the value and condition of the property, it is worth the mortgage lender making a loan to you secured on the house.

You shouldn’t rely merely on the valuation report when reaching a decision on whether to proceed with buying a house, whether it is adequate for your needs and whether its condition is adequate. The exception is if the property has the benefit of an NHBC Certificate and has been built within the last ten years. You can find more information about the NHBC Scheme at www.nhbc.co.uk

The Home Buyer’s Report

This is a more detailed report which usually costs around 400 pounds plus. The surveyor prepares a more detailed report for you, indicating matters which require urgent attention or that may require attention in the future. This report is prepared on your behalf when buying a house and is not for the benefit of the mortgage lender.

People often think that they have had a survey done if they’ve simply had a valuation report undertaken. Not true! At the very least, you need a Home Buyer’s Survey when buying a house.

If your surveyor does spot a potential costly problem, such as extensive woodworm, damp, wet rot etc, then you might be able to negotiate a reduction in the purchase price to take repairs into account. In this way, the survey can pay for itself. Bear in mind that the seller is not legally bound to tell you about any structural problems; it’s up to you as the buyer to find them. Are you likely to be able to find them yourself? Most would answer “No” and this is why the survey is so important.

Make sure you read the small print though; the surveyor may not inspect unexposed or inaccessible areas, for instance below the floorboards or the roof space.

The full structural survey

This is the most expensive type of survey and obviously, the most detailed. Most people are put off by the cost of this type of survey but when buying a house, surely it is better to know what you are letting yourself in for! There are circumstances when full structural really is the only option;-

1) If the property is more than 80 years old.
2) If the property is of high value.
3) If you plan to alter the property structurally.
4) If the property is not of standard construction, in poor condition or in need of renovation.

This type of survey in theory gives the true state and condition of the property but again, make sure you read the small print for exclusions!

If you’re unsure as to which survey you should choose when buying a house, don’t hesitate to seek legal advice from a conveyancing solicitor. You can also find more information at;-
www.rics.org/Property/ResidentialProperty.