How to Choose the Right Property Survey

Whenever you buy a property with a mortgage, the lender will insist on a Valuation Survey to check the property is worth lending against. Unfortunately such valuations exist to protect the lender’s interests, not to inform you adequately as the buyer. The fact you generally pay for this survey no doubt explains why 80% of homebuyers rely on the lender’s valuation. But on this occasion you shouldn’t follow the crowd. If you’re smart, you’ll commission your own independent survey. When you do you must choose between a Homebuyer’s Report, and a Building Survey (aka a “full structural” survey).  This article will help you understand why it’s worth paying for an independent survey, what you can expect for your money, and how the type of property you’re buying should determine which survey you choose. 

 Valuation Survey: Necessary but Insufficient

Valuation Surveys are brief and superficial because your lender is less concerned with the quality of the property than the security of their loan. In the current credit climate this loan is generally a much lower sum than your offer price. The surveyor will usually be in and out of you future home inside an hour, or may simply “drive-by”.  Such a survey will merely check that the price paid is in line with similar properties in the area given its age, condition and location. It won’t scrutinise your future home for any potentially costly faults. You’ll get a copy of a short and fairly uninformative report. Since you are not the client, you will have no redress over any errors. So you are unlikely to be any better informed or protected than you were before – despite having paid up to £300 for the privilege.

 Homebuyer’s Report

The surveyor will usually spend at least a couple of hours in the property and up to half a day producing a standard format report typically about 20 pages in length. You can expect this to be written in plain English. It will assess whether the property is a reasonable purchase at the offered price so you can make an informed judgement as to whether your purchase is sound and your offer is fair. You can expect a comprehensive account of the property’s overall condition, and a summary of any urgent or significant repairs. If you do wish to re-negotiate you will do so with a much surer grasp of the hidden costs you’d face as the new owner. The valuation should cover both market and insurance value.

 Building Survey

Unlike the Homebuyer’s Report this does not automatically include a valuation unless you ask for one. The contents will be much more detailed (up to 40 pages or more), and the language more technical. If you’d appreciate photos to illustrate the analysis, do check this before commission as there is no standard format for this survey. The surveyor will make a thorough check of every visible or accessible part of the building, spending up to a day on site. You can expect to wait up to two weeks for the full report. If you need to get a verbal top-line earlier you should make this clear at the outset.

You can expect a detailed account of major and minor defects, a thorough analysis of the building’s construction and condition, and technical advice on remedies and ongoing maintenance. Both survey and report can be tailored to your particular concerns.    

 Choosing the Right Survey

A Homebuyer’s Report is well suited to any standard (brick or concrete) property in reasonable condition built after 1930, which has been subject to little in the way of alteration or extension.

A Building Survey is worth investing in for properties built before 1930, when building regulations were more relaxed. Period properties may not have the foundations expected today. Full surveys are also worthwhile for any property of less conventional construction (timber frame or stone), any dilapidated building, and also anywhere which has been extensively renovated or where you plan major alterations. You should regard the extra expense as a worthwhile investment given that such properties are more expensive to fix and harder to value.

 Choosing the Right Surveyor 

Lenders may offer to upgrade your survey for an additional payment, but you have no guarantee as to the quality of the surveyor. Choose someone independent who knows the area well. If you are buying a period house, make sure that the surveyor has relevant expertise.

An independent property survey is always worth paying for to avoid costly mistakes. Think of it as the best value insurance policy you’ll ever buy.

Mind the Neighbours

You’d be forgiven for assuming that problem neighbours were confined to sink estates or high density urban housing. You’d be mistaken, as shown by a recent experience of a client of mine.

I got involved on a negotiation only basis with a good sized detached property in a Hampshire hamlet. Conservation area, quiet rural road, large attractive plot, slightly underwhelming 1960s house which nonetheless had some potential.  That said, the asking price was stiff – fair value would have been around £740K, but the place was being marketed well north of £800K. 

As I usually do, I got to the viewing early, and wandered down the lane. I simply wanted a quick look at the historically top priced property in the neighbourhood, just to convince myself that my judgement was right about the place I was assessing. Halfway down the road I was accosted with an   aggressive “CAN OI ‘ELP YEW?!” by a chap in the field between the two  properties in question. I cheerfully declined, and went on my way. But his belligerence stuck in my mind – it was hard to seen how I could have been mistaken for a burglar. Later that morning, having completed the viewing and discussed our negotiating strategy, I mentioned the incident and suggested the clients ask the estate agent about this guy before we start the offer process.

It quickly transpired that he and his partner were living in a summer house in the large neighbouring field which they’d ostensibly bought to keep horses. The building did not have residential planning permission, and none was likely to be granted given the conservation area status. The couple were “known to the local council” (always an ominous phrase), whose sterling efforts to remove them were making little progress. Of course this kind of thing should be spotted by any decent conveyancer in enquiries before contract. The estate agent in question owned up the instant the issue was raised. How he thought anyone would buy the place in the circumstances is an interesting question. Unsurprisingly no negotiation went ahead. It just shows that it pays to look before you leap – and that a second set of eyes can help you avoid wasting time.

How to Choose the Right Estate Agent

In a slow market, it’s critical to choose the right estate agent. But faced with dozens of estate agents who look and sound alike, how do you identify one who will do a good job of marketing your property? 

When you invite agents to value your property, they’ll have a shrewd idea of what your property will eventually realise. But they also know vendors generally instruct those agents who suggest higher valuations. Inevitably such competition is likely to produce inflated valuations to secure the instruction. So think twice before you opt for the agent who blithely suggests a temptingly high asking price. A lower price which generates plenty of viewings is better than a higher price which satisfies only your vanity. 

Happily there’s a simple solution to this dilemma. Ask every agent to give you two prices – an asking/ marketing price, and a target selling price. What you should be most interested in is their anticipated selling price. This will help you assess offers rationally. It also enables you to budget realistically when searching.  Anyone proposing a very wide or small spread between the two prices should explain the gap. 

Once you’ve heard a target selling price, invite the agent to give examples of comparable local properties which they’ve sold for similar prices in the last 6 months. Good agents will come prepared with such illustrations. You’re looking for evidence they can deliver as promised. Avoid valuations from agents whose stock is generally unlike your own property. Personal recommendation is always helpful, but friends and colleagues may not be expert guides to an agent’s form where your house is concerned if they’ve sold much larger or smaller properties, or ones in a different neighbourhood altogether. 

All agents will enthuse about their costly but largely indistinguishable prominence on national websites and in the local /regional press. In reality most agents who maintain a large print presence nowadays do so more to impress potential vendors than actual buyers. Find out how they maximise viewings of properties fresh on their books. Ask about any marketing tactics that may be relevant to your property.  Listen for telling details, but don’t feed leading questions.

Establish how they manage viewings. Economic reality means that the valuer you’re talking to won’t conduct many of these. Most viewings are conducted by junior staff, or even part-timers for higher workloads at weekends. There’s little point in expecting special treatment. But you should expect helpful and honest feed-back, and a senior member of staff to remain accountable over all viewings of your property.

 You’ll generally find the rate card negotiable nowadays. Driving too hard a bargain may lower the quality of service. Treat offers of low commission rates as warily as you treat the highest price valuations. Instead consider aligning your interests with theirs by suggesting a small bonus for securing a minimum price and/ or selling within a certain time frame, according to your priorities. Don’t get tied into too long an exclusive contract. Don’t be afraid to change agents or instruct a second agent if you are unhappy with progress. Make your expectations clear at the start, and ensure the contract you sign reflects these. Instructing multiple agents smacks of desperation, and is best avoided.    

Vendors can easily assume that when they sell fast for a good price it’s all because they had a beautiful house. When this doesn’t happen it’s easy to assume the agent is at fault. It’s your responsibility to choose the right agent for the right reasons. Doing so will always give you the edge over vendors of similar properties who’ve chosen the wrong agent for the wrong reasons.