Homebuyers – To survey or not to survey… Should that be a question?
25/9/18
This is an article on the importance of a Homebuyers Report By: Ellen Hyslop – Business Case Handler at Open Vision Finance
Purchasing a house will no doubt be one of, if not the biggest, financial commitments in your life, so you’d want the house to be in a good condition upon buying it, right? So why do so many people decline a Homebuyers Report?
If I told you that only 20% of homebuyers pay for a HomeBuyers Report, would you be shocked? Perhaps not! Let me detail what the remaining 80% of homebuyers aren’t getting their new house checked for.
What is included in a HomeBuyer Report?
The Middle Level – HomeBuyer Report includes details of:
- A current market valuation of the property (some homebuyers reports will be offered with or without a valuation)
- Energy performance ratings and colour-coded condition ratings
- Description of the construction and condition of the property on the date of inspection
- Details of urgent problems which should receive attention before signing a contract
- Identify things that need to be investigated further, to prevent serious damage
- Highlight any problems that may be dangerous
- Advice on maintenance of the property where needed and a suggestion of the steps recommended to be taken before you exchange any contracts
- Extensive search of the roof space and underground drainage inspection
- Background information on the property and location
- An estimate for the cost of re-building the property for insurance purpose
Please do tell me if I’m wrong, but I don’t think I’m only speaking for myself when I say I’d like to know if my dream house suffered with damp or wood rot, and I would definitely like to know if there was anything wrong with the house that is so bad, that it is deemed to require specialist attention before even signing the contract! So I’ll ask again, why do so many people decline a homebuyers reports?
“It’s an extra expense to pay out”
I know, buying a house is expensive, with the prolonged period of saving for the right deposit, the legal fee’s, the product fee’s, the list can sometimes seem endless! Yes, the HomeBuyers Report is an ‘optional’ additional expense, costing anywhere from £400 onwards but, I use the term ‘optional’ very loosely!
Why wouldn’t you check your new home for these under lying issues before signing a legally binding contract, tying you to that house! If upon viewing the house, your Estate Agent starting listing issues (that the survey could potentially uncover), I think there would definitely be a few ‘Umms and Ahhs’ and ‘Ifs and Buts’ before a decision is finally made. Perhaps I could even go a little further and ask, if the advert you saw detailed the issues before the viewing, would you even go as far as viewing it? Probably not.
So many issues, defects and faults that are uncovered in the HomeBuyers Reports can go completely unnoticed by an untrained eye, only to reveal themselves at a later date resulting in hundreds (sometimes thousands) of pounds being paid out to fix. It’ll only be then that you wished you knew of them earlier, maybe then you could have negotiated a new purchase price and saved yourself thousands in the long run, which makes me think – maybe it isn’t an extra expense, but quite the opposite. In fact, buyers who did not get a survey faced, on average, £5,750 in repair costs according to White Horse Surveyors. I know which I would rather pay.
“The mortgage valuation will show any issues”
Unfortunately, this is a common misconception that many people do believe. However, I cannot stress enough the difference between a Mortgage Valuation (Entry Level) and the Homebuyers Report (Middle Level).
In simple, non-jargon terms, the mortgage valuation is done mainly to benefit the lender and are not in-depth surveys. This is the Entry Level survey and is a limited check on the home that lenders arrange to be sure that it is suitable security to have a mortgage against. So this valuation will simply give them the value of the property and uncover only the obvious, visible defects during the brief inspection. Whereas the Homebuyer Report is really for your best interest!
There are generally three main levels of surveys for you to consider when purchasing a property:
- Mortgage Valuation (Entry Level – for the benefit of the lender)
- Homebuyer Report (Middle Level – for the benefit of you)
- Buildings Survey (Highest Level – for the benefit of you)
To survey!
When you put things like this in to a real-life perspective, it really drives home the importance of them. You wouldn’t buy a family car that hasn’t been serviced or hold a valid MOT, nor would you invest your life savings into an investment plan you haven’t had any advice on. So why invest your money into a house based on face value?
There are a number of different surveys and reports, in addition to those noted above which you can arrange to give you peace of mind that your dream house can in actual fact be your home. If you are considering purchasing a larger or older property, or planning to undertake major works, the most comprehensive report may then be better suited to you – Highest Level – Buildings Survey. If you are a homebuyer and would like to know your options, please feel free to contact us for a non-obligatory advice appointment, as we’d love to discuss these further with you.
When arranging a any survey it is important to obtain this through a RICS qualified surveyor, who will be able to provide an impartial assessment of the property. We have a number of surveyors who would be happy to recommend across the North Somerset and South West regions. Please get in touch with us.
If you have found this article interesting or would like to arrange an appointment with one of our experienced mortgage consultants, please get in touch with us on 01823 444022 or by email to advice@openvisionfinance.com.
https://www.whitehorsesurveyors.co.uk/2017/10/4-big-reasons-home-buyers-get-survey/
https://www.reallymoving.com/surveyors/guides/what-is-a-homebuyer-report
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