The purchase of a home normally represents the largest financial outlay made in a lifetime. It is essential, therefore, that reliable advice about the value and condition of the property is obtained from a qualified and experienced firm of Chartered Surveyors.
There are three levels of inspection. The first is a simple valuation for the mortgage lender which will ascertain – or not – whether the property is worth what you have agreed to pay for it. The second is an RICS Home Buyers’ Report (Survey and Valuation) Level Two, which will go into more detail and point out any potential problems or defects such as cracks, leaks, woodworm etc. The third and most detailed report is a Building Survey. In this report the surveyor will identify areas of concern but will also offer solutions and ways of fixing any problems – making it very clear what the purchaser would be undertaking.
A valuation is not a survey. It’s a limited inspection of the property which your mortgage lender may insist upon to ensure it’s worth the money they are lending you. Valuations may also be undertaken for a range of different purposes.
Although a valuation involves only a superficial inspection of the property, any significant defects which might affect value can also be identified at this time.
In providing a valuation, the surveyor will take into account past and current levels of transactions in that particular price range and will also consider other factors such as whether any development is proposed in the area.
If the valuation is for mortgage purposes, the report will normally be presented on a pro forma supplied by the finance house. The potential purchaser will receive a copy of the report, but the sole purpose of a valuation report is to provide the bank or mortgage lender with sufficient information on which to base their decision regarding the loan.
RICS HOME BUYER REPORT (SURVEY AND VALUATION) LEVEL 2
A Homebuyer’s Report is sometimes referred to as a level 2 report. It is designed to allow a purchaser to make a reasoned and informed decision on what is a reasonable price to pay for the property, taking into account any repairs or replacements the property needs.
This type of survey is generally suitable for properties up to £1,000,000 and within 2,000 square feet of internal floor area. The property should have been constructed in the preceding 100-year period. An RICS Homebuyers’ Report is not suitable for substantial, old granite properties.
The report, presented on a standard form, will provide general comments on the condition of the property as well as highlighting any urgent or significant matters which would be reflected in the market value.
The report also provides a market valuation, together with a reinstatement value for insurance purposes.
A Building Survey involves an in-depth inspection of the property and associated buildings including boundary walls, paths and driveways. Sophisticated modern instruments are used to assist in the identification and recording of defects including dampness. In certain instances, samples of defective materials are taken and sent away to laboratories for detailed specialist analysis. Photographic evidence of some of the defects will also be used in the presentation of the report.
The report will describe the materials and construction details of the various elements of the building. It will outline the current condition of each element, the nature of any defect, the projected effect on the overall structure of the property of any defect, and make recommendations regarding any action that needs to be taken. If requested, the surveyor will obtain an approximate estimate of the remedial work required from a reputable building contractor specialising in such work.
A full report, including photographs, will be supplied to the client. The report is confidential and is for the sole use of the client and their professional advisers.
BUILDING MAINTENANCE SCHEDULE
A Building Maintenance Schedule is an itemised document which identifies defects to a property, together with a recommended course of action. The document also includes all items of a regular maintenance nature and the anticipated intervals when such works should ideally be undertaken.
BUILDING DEFECTS DIAGNOSIS
Building Defects Diagnosis reports revolve around the investigation of individual defects within a property. Often the causes of such defects are hidden with only the symptoms apparent, for instance where water has leaked through defective concealed chimney flashing causing staining to the ceiling inside.
Insurance Re-instatement Valuations are included within all Homebuyer’s and mortgage valuation reports. Their purpose is to provide an estimate of the amount for which a property should be insured. Although a new owner will insure a property at the time of purchase, the insurance should be index-linked to ensure that the property remains insured for a satisfactory sum. Over time such index-linking may need adjustment so an updated insurance valuation may be required.
PROPERTY DISASTER RECOVERY MANAGEMENT
In the event of a disaster such as fire, flood, subsidence, landslip and heave the insurance company may instruct a surveyor to oversee all repair and refurbishment works in connection with the disaster. The surveyor’s involvement may also include the preparation of a Schedule of Works, procurement of builders’ services (tendering) and the certification of payment to the contractor.
RESIDENTIAL DEVELOPMENT APPRAISAL
RDA is the analysis of a development scheme to identify the land value, profit margins or gross development value. Often such appraisals are undertaken for a lender or investor prior to commencement in order to determine the feasibility of an individual scheme. Alternatively, appraisals can be undertaken to determine land value in a competitive situation.
SCHEDULES OF CONDITION
Schedules of Condition are traditionally undertaken prior to the commencement of a lease or license and are often attached to the lease to establish the condition of the property at that point. Such schedules can also be undertaken on surrounding buildings when development is anticipated.
Schedules of Condition can be invaluable at the end of a lease term when dilapidations may be negotiated, and can determine the condition of a property at a given point. Schedules of Condition comprise a detailed written description of condition supported by photographic evidence.
Photographic Schedules provide annotated photographs which record the condition of a property. These schedules represent a less comprehensive record and can be completed within a short time frame and to a specific budget.
SCHEDULE OF DILAPIDATIONS
A Schedule of Dilapidations clearly defines the items that are in disrepair. These items may form part of repairing covenant through which either a landlord or tenant has obligations.
The Schedule of Dilapidations is a written document formed in a Scott Schedule and can be supported by photographs
Residential surveys are carried out by our experienced team of Chartered Surveyors. Meet the rest of the team here.