We know the feeling, you’re up to your neck in paperwork, and money is flowing out of your bank account from every direction. Then, the question of which survey comes around. You might even be tempted not to have a survey at all. After all, your mortgage lender will be doing one anyway.
The problem is, your lender will be carrying out a basic valuation report that only scratches the surface to make sure the property is suitable security for the loan. It’s you that will need to deal with any problems, not the bank, so it’s strongly recommended you have a survey of your own to protect your interests.
To ease the pain of swallowing another cost, and because surveys can be incredibly valuable, it’s important to recognise them as part of your investment. Surveys can save you a lot of money and heartache over the course of your ownership, and crucially, during your negotiations to buy the property.
A survey is leverage, use it to get a better deal where you can. If for example the surveyor discovers that the property needs a full damp proof course that will cost thousands, you can try and negotiate this off the purchase price.
Some issues may even make you walk away. This is a good thing. Avoiding the money pits is just as important as sourcing great deals if you want to be a successful property investor long term. Don’t be afraid to walk away even if you have already paid for things like legal work and the survey itself, these costs could have saved you from losing a lot more.
There are three main options for you to choose from. Let’s go through them to see what’s right for you…
The condition report is the most basic choice available, suitable for properties in good condition such as those recently renovated and new builds. The report will mention any urgent defects, potential future issues and any legal considerations.
These surveys generally cost in the region of £250-£300.
A homebuyer report or a property survey, is the most popular type of survey. It’s popular because it’s suitable for properties in reasonable condition, which covers the majority of properties on the market.
Homebuyers reports are more in-depth than condition reports and will report problems with the property inside and outside. Advice will be provided on how to rectify each issue and how urgently each repair should be completed.
The homebuyer report will also provide information on the local area, the environment, the energy efficiency of the property, and any legal aspects that could influence your decision to purchase.
Despite this being a thorough report, the surveyor won’t lift floorboards, tear up carpets or move any furniture so it won’t cover every last inch of the property.
Pricing can vary depending on whether a valuation is included, but typically these surveys cost between £400-£500.
Also known as a structural survey, this is the most comprehensive survey available and is suitable for all properties, but more commonly used for ‘higher-risk’ properties. Properties that have suffered from subsidence, very old or large properties, and those that are in a poor state of repair are prime candidates for this type of survey. It’s also advisable to have a building survey if your property is going to undergo a change of use.
A building survey gives a detailed account of the property’s condition and provides full recommendations to correct any defects. The report details the urgency of each existing problem and risk factors for the future, helping you to plan the main renovation project and ongoing improvement works.
This type of survey will include the surveyor looking behind walls, checking the attic and under floorboards, so if your property needs a thorough renovation and is particularly dilapidated, this should be the survey of choice for you.
It’ll come as no surprise that this is the most expensive option. These surveys range from £500 to £1,500 depending on your property and what’s included. They may or may not include a property valuation and re-build figure.
Your surveyor should be a member of a recognised governing body such as the Residential Property Surveyors Association (RPSA) or Royal Institution of Chartered Surveyors (RICS).
You can view the websites of these organisations to find surveyors, here:
It pays to shop around; your mortgage lender will likely try and ‘upsell’ you a more expensive survey instead of their usual valuation report. This can sometimes work well as you’ll only be paying for one survey and it’ll be the one that you want. However, beware inflated costs. It can be cheaper to pay twice – for the lender’s valuation survey and for your own more comprehensive survey provided by a third party. Shop around and find out before committing to either option.
So, now you know all you need to know about survey’s, let us help you find your next investment opportunity…
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Whether you’re a seasoned professional with a sizeable portfolio already, or a complete novice that just wants additional cash to supplement your day job, we can help…
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Once you’ve found a property you’d like to look at, it’s important to know what to look out for at your viewing. Our previous blog post looked at 15 warning signs to look out for when viewing property, so why not print or save a copy to take with you!
-Jonathan Bootland, director and co-founder of Property Deal Store