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When you are buying a home you need to know the value of the property. It's not only you that needs to know the true value though. The mortgage lender will want to ensure that there is an adequate difference between the value of the property and the value of the loan. This is because, should you default on the mortgage, as a last resort, the lender may need to repossess the property in order to recoup their investment. Therefore, the lender will usually have a valuation done by an independent source. At the most basic level, this ensures that properties are purchased at, or close to, an appropriate sum.
There are three main ways to get your property valued and surveyed.
First of all, a basic survey of your property may involve a simple 'drive by' of the building and its surrounding area.
The most common form of survey a lender will require though is a homebuyer's report, which will go into far more detail than a basic survey. It will provide an overview of structural issues with your home that could cause a problem in the years to come and affect the value, although it may not be as detailed as a full structural survey. It will look at property issues that could affect a lender's ability to recoup their capital if you fail to pay the mortgage. It uses a standard red, amber, green rating system. This system indicates where issues with a property are, and how serious they are at this stage.
It sounds fairly comprehensive, but in reality the homebuyer's report is a mid-level survey. It will cover most of the building related issues that could impact on value, such as subsidence, damp and rotting wood. It should provide you with a measure of confidence that you are buying a decent property.
A household survey, or full structural survey, will go into even more detail about your property. It's often a good idea to have a full structural survey when buying a property, as it will assess all issues that could affect your property, both in the short and long term. For example, surveyors will assess difficult to reach areas like roofing beams. They will look at outdoor fences and exterior walls and predict if maintenance will be required. They not only look for issues, but also make property recommendations to help you understand the cost implications of buying the home over the next few years.
Getting a full structural survey will ensure that you are buying a property with your eyes open. The homebuyer's report is in reality more for the lender's purposes than it is yours, and therefore will provide you with far less piece of mind and understanding than a full structural survey.
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