These surveys are much more intensive and are designed to alert you to any potential problems or defects that are present in a property before you make the decision to buy it. However, many lenders will offer a valuation for free to entice new customers. If the surveyor is in agreement with the asking price or the re-mortgaging price of the property, your lender is likely to offer you the mortgage that you have applied for.
On the other hand, if the surveyor is of the opinion that the price is higher than the property is actually worth, you may get a down valuation. This could lead to the bank providing you with a revised mortgage offer, which can affect the purchase or re-mortgage. A down valuation occurs when the surveyor decides that the property is worth less than the asking price or agreed sale price.
They will not only look at the condition of the property but can also take local market activity into account to give you a suggested price. Spend some time researching the value of the property that you want to buy or sell. Take some time to look at how much similar properties in the area have sold for over the past few months to get an idea of a realistic price. Depending on their situation, they may also be keen to push the sale through even if it does mean less money.
However, accepting a challenge on the valuation is at the discretion of the lender. If you don't have any evidence that disproves the lender's valuation, you could potentially accept the new loan offer and try to make up the shortfall another way.
It's worth asking an independent mortgage broker for advice on this. Down valuations can put a tremendous amount of strain on the already stressful process of buying a home or remortgaging. Look at how much properties in the area have actually sold for over the past three to six months so that you get an idea for what a realistic price should be. A good rule of thumb is to go with the middle valuation or calculate an average.
This can help guide your decision on how much to put your property on the market for. Financial Services Limited. Financial Services Limited is a wholly-owned subsidiary of Which? Limited and part of the Which? Money Compare is a trading name of Which?
Money Compare content is hosted by Which? Limited on behalf of Which? Mortgage calculators. Compare Mortgages. In this article. What is a mortgage valuation? How do mortgage valuations work? Mortgage valuations vs house surveys How much does a mortgage valuation cost? What happens after a mortgage valuation? Why does a down valuation matter to your mortgage? How common are down valuations? A valuation report gives an indication of the value of the property and so it can be widely applied to all property types.
The valuation report will look at the condition and location of your house to provide an estimated value. A mortgage valuation will also determine the value of your home. They will use their expert local knowledge of the property market to price your home, looking at similar properties in the area, too. It's worth noting that you will need to compare at least 3 estate agents valuations when it comes to selling your home.
A Valuation Report is not as detailed as the other survey types available, simply providing you with an overall valuation of the property and any obvious defects that could affect the price. It will not highlight any hidden problems which is why a Homebuyers Survey is often recommended. You can even ask for a valuation alongside the Homebuyers Report, ensuring you get more for your money. The valuation will be based on the surveyor's knowledge of comparable prices concerning the local area and other research.
Unlike the other survey types, you will not be advised on any maintenance or repair work needed. The condition of the property is observed and visible issues like damp, electrical problems and obvious structural damage are highlighted. As it's not as thorough as other inspections, the report is usually only pages long.
However, taking into consideration the fact that this type of report is a very basic review of the building and only gives details specifically on the condition, then it can be considered as rather expensive for what you get.
Data from TSB. Although on some occasions, your mortgage provider will include a valuation as part of the deal. They create what is known as a loan to value ratio, the lower this ratio, the lower the risk to the bank. The surveyor who visits the property will follow specific instructions from the lender. The lender will provide the surveyor with their requirements, and the surveyor must check that the property meets each one. The final report may only be a couple of pages and will list all the main details about the property, the recommended valuation, and comparable evidence.
In the industry, we call these tick box valuations, as they are quick and involve some multiple-choice fields. They only give a brief description of the condition and go into no specific detail. The lender wants to assess their risk; they are not concerned about how much money you need to spend on repairs once you move in, or what you will achieve on resale, for these things you will need an independent RICS surveyor.
RICS Home Surveys Level 2 are for property buyers who wish to understand the buildings they are buying and the costs associated with the repair, maintenance, upkeep, in addition to how the property is likely to perform in a future market resale. It is possible to use these reports as a tool to renegotiate the purchase price if the surveyor finds any significant defects which are going to be costly to repair.
The independent survey usually happens after the acceptance of your initial offer. You can get a quote using our instant online survey quote form, and we can carry one out for you. You can also discuss with us which survey is appropriate for your specific needs by calling us on There are three levels of RICS home report.
Level one is the condition report; these reports check the basic condition of the building.
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