Homebuyers shouldn’t skip a survey
Karen Rodrigues, Sales Director at eConveyancer
All too often the survey is ignored by homebuyers, opting instead to use the lender’s valuation as a guide. While I would argue this is a mistake, I do understand why people choose to not pay for a survey. After all, buying a house is an expensive business. Despite the current slowdown in the market, this hasn’t released any tangible pressure on house price growth as yet.
According to the latest data from the Office for National Statistics, UK average house prices increased by 9.5% over the year to September 2022. The average UK house price was £295,000 in September 2022, which is £26,000 higher than this time last year.
Now, not only do homebuyers have to get the cash together for the deposit, they also have to spend money in a number of other ways. Legal fees and Stamp Duty will typically add thousands of pounds onto the total cost, while there are often requirements to pay for moving, storing, and cleaning to factor in as well.
No wonder homebuyers look to shave off as much money as they can, wherever they can. That’s why the survey is often overlooked. After all, goes the thinking, if the lender’s valuation tallies with what the seller and vendor have agreed, where’s the problem? Indeed, the Royal Institution of Chartered Surveyors (RICS) found in 2021 that 40% of those who didn’t get a survey did not believe they needed one.
However, that line of reasoning misses the point. The lender’s valuation is for the lender’s peace of mind, not that of the borrower and so the latter should not use it as a blanket summary on the quality of the property they’re buying.
It’s incumbent on the borrower to do some homework and be armed with accurate information on the property’s condition. After all, apart from property, when are you ever likely to spend anything like that amount of money?
A survey is the best way of ascertaining the state of the property, what work should be done over the next few years and if there are any ‘red flags’. Many of these issues will be hidden to the untrained eye but are worth knowing in order to avoid making a big mistake with a property purchase. The lender’s valuation is not going to mention the guttering that could do with being replaced, for example, or face the prospect of damp issues. And how many homebuyers are experts at spotting woodworm or subsidence?
For the sake of ‘saving’ less than £1,000, not taking out a survey can cost the borrower thousands of pounds. RICS also reported few years ago that found that homebuyers ended up spending £5,750 on repairs to their property after issues (which would have been picked up by a survey) became apparent.
The survey can work to the homebuyer’s advantage as well. It means that can make an informed decision, buying a property with their eyes wide open. Issues raised in the survey can be used a bargaining tool, helping to possibly negotiate a reduction in the price, or can be the sign that it’s time to walk away from the deal; a lender’s valuation will not provide any such assistance.
I will always argue that the expert advice mortgage brokers provide to their clients should not end with the mortgage. The borrower needs help and guidance with the whole homebuying process and ensuring more-than-adequate information is available about the state of the property is part of this. Just as the broker will be remembered positively for their help in securing the right mortgage product, so will they if they advised to get a survey which subsequently uncovered a major issue with the property.
From the broker’s perspective, surveys can provide a supplementary revenue stream. For example, if they instruct a survey on their client’s behalf through the eConveyancer platform, their client will be contacted by The Moving Portal in short order and the broker will obtain a fee for the introduction.
Expert advice should include ensuring clients do not enter into a major financial commitment with their eyes closed. The borrower will thank the broker, who in turn will receive additional revenue. That’s a win-win, surely?
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