My wife and I are thinking about moving. During previous moves, we had research carried out into the conditions for obtaining a mortgage. But that does not apply now because we are mortgage-free.
How can we get a survey done if it is not a requirement for getting a mortgage, and do we need to have one?
These are uncharted waters for us, so I would like any advice you can give.
Buyer beware: the last thing you want is to discover that your new home is hiding nightmares
Ed Magnus from This is Money answers: There is no legal obligation to organize a survey yourself when purchasing a home, although it may be wise to do so.
A surveyor can point out all kinds of costly problems: rising damp, subsidence, a leaking roof, wood rot and asbestos, to name just a few.
The first thing we need to explain is that there are different types of studies.
It sounds like you have relied solely on the lender’s mortgage valuation in the past.
These are required by the mortgage lender, but are not an investigation and only involve a very limited check. Usually the appraiser does not even enter the home, but simply drives by or searches for the home online.
The aim is to check whether the property is suitable for the bank to lend money to, and whether the amount paid represents its market value.
It is therefore usually recommended that you organize your own investigation to identify any problems with the property.
This must be carried out by an independent chartered surveyor certified with the Royal Institution of Chartered Surveyors (Rics).
The type of survey you decide to have done will depend on the home you are purchasing and the level of detail you think you need.
What types of real estate research are there?
The cheapest and simplest survey you can get is a Rics Level 1 home survey, previously known as a condition report. According to property advice website HomeOwners Alliance, this typically costs between £300 and £900.
The survey will describe the condition of the property, identify any risks and potential legal issues and highlight any pressing defects, Rics said. It is best suited for new or conventional homes.
The next level up is the Level 2 Survey, formerly known as a Home Buyer Report. According to HomeOwners Alliance, this typically costs between £400 and £1,000 depending on the size of the property.
It includes all the features of the Level 1 survey, but with a more comprehensive roof space and drainage room inspection, Rics said.
The most extensive investigation that a buyer can choose is a level 3 investigation, also called structural investigation.
Check it out: After an offer has been accepted on a property, buyers have the opportunity to organize an independent investigation before exchanging contracts
Costs typically range from £630 to £1,500 depending on the size of the house.
It is recommended for older properties or properties that are in a poor state of repair, and provides an in-depth understanding of the condition of the property and can also include estimates of the cost of repairing defects.
If you are planning major construction work, this may be the right choice.
For those purchasing a new build home, it may also be worth doing some research into when the sale is completed.
These surveys check that the property meets the standards the builder or developer has committed to and allow you to point out any imperfections from the outset.
If the building is under warranty, which is the case with most new construction, the builder is legally obliged to correct these.
We spoke for expert advice about this Rob Dixco-founder of property advice website Property Hub and co-host of The Property Podcast, Angela Kerrcontent director at HomeOwners Alliance and Tony Gambrilarea sales director at Chestertons real estate agents.
Angela Kerr says getting a survey is a no-brainer considering the cost of buying a property
Should they have a home survey done?
Angela Kerr replies: Congratulations on becoming mortgage-free, that’s a real milestone.
Having an independent, expert survey carried out into the condition of your property can reveal potentially expensive issues, from structural issues to minor repairs.
When you’re spending hundreds of thousands of dollars of your hard-earned money on a home, a survey seems like a no-brainer.
Rob Dix adds: If you do not get a mortgage, you decide whether you receive a survey or not.
For very new properties it may not be worth it, but otherwise the costs, which are usually in the hundreds of euros, are small compared to the total price you pay.
What type of research do they need?
Rob Dix answers: Surveyors are regulated by the Royal Institution of Chartered Surveyors.
Rics offers three standard survey levels, each with a different level of detail – with more detailed reports obviously coming at a higher cost.
Rob Dix says the Level 2 survey is the most popular among homebuyers
The Level 2 report, which used to be called a homebuyer report, is what most people go for.
Rics says this is suitable for most conventional properties that are not particularly old, have been extensively modified or require major works.
With this report you can only ask for a valuation, which will look at the condition of the property and what maintenance or repairs may be required.
You can also add an appraisal so you can be sure the price you pay is fair and includes a recovery amount.
This estimates how much it would cost to completely rebuild the house and can be used for insurance purposes.
Angela Kerr adds: Talk to a few surveyors to discuss which type of survey is best for you.
You get what you pay for: the lightest Level 1 survey assesses defects with a traffic light system, while a Level 3 full structural survey is more thorough and goes into much more detail.
Remember that you are paying for a service. Let your surveyor know in advance if there are any issues with the house that you would like him or her to specifically look into.
When should they book the survey?
Angela Kerr replies: You as the buyer must organize and pay for the home inspection.
You should arrange one fairly quickly after your offer on the house has been accepted by the seller.
This shows that you are a serious buyer and also means that sooner or later you will know what you are buying.
Tony Gambrill, area sales director at Chestertons, says buyers should try to choose a local surveyor
How do they find a surveyor?
Tony Gambrill replies: Knowing which survey is most applicable to your situation will make it a little easier to shortlist some suitable surveyors.
The safest way to find a recommended surveyor is to go through the website Rics website or the Website of the Alliance of Owners. This allows you to rate surveyors by field of expertise and location.
Choosing a local surveyor can be an advantage as they should be more familiar with the prices and conditions of properties in the area and therefore should have the fundamental knowledge on which to base their final judgment.
What if the research causes problems?
Angela Kerr replies: Once the surveyor has sent you his report, you can call him with any follow-up questions.
This may reassure you enough to proceed with the purchase. However, if the investigation reveals problems or suggests that further investigation is needed, you may decide to call in specialists for further investigation.
For example, if the surveyor suspects asbestos or woodworm, or if you need detailed quotes for areas that need repairs.
If this happens, you can use your research report to renegotiate the price you are willing to pay.
Your offer is ‘subject to’ and you are not legally obliged to purchase the house until the moment of exchange.
It is therefore reasonable that you return to the broker with relevant extracts from the inspection, any repair quotes and a revised quote.
Don’t be shy about renegotiating the price, but keep it sensible and in line with the cost of the work required.
Rob Dix adds: Please note that surveyors cannot tell you everything from a visual inspection, so may mark areas for further investigation.
It can also be scary because there is never a report saying ‘everything is fine’.
Even in the most pristine property there will always be potential problem areas, but from our experience most surveyors will be happy to have a chat with you after the formal report has been issued, to explain anything that particularly deserves your attention.
Tony Gambrill adds: One thing to always keep in mind when reading the surveyor’s findings is that one of the purposes of their report is to highlight any problems with the property.
Reading the survey may therefore make buyers less enthusiastic. However, if any findings are unclear, we recommend that you contact the surveyor and discuss any questions you may have.
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