Mortgage Valuations, Surveys and Full Structural Surveys - What's The Difference?
First off, the Mortgage Valuation Report is just a check carried out on the valuation of the property.
It’s done for the mortgage lender (not you) in order to see whether the property is worth the amount that you want to borrow by way of a mortgage loan.
Normally, the report is sent straight through to the lender and the first you will see of it may be when you receive the mortgage offer.
Of course, if the valuation reveals that property is not worth enough for the lender to make the loan, then no mortgage offer will be forthcoming and you will have to go back and re-negotiate the price with the vendor or take out a lower loan and put in more equity yourself.
The Valuation Report may take as little as 30 minutes to do for a smaller property and information is normally quite minimal. Some agents have even said to me that they thought some surveyors did not even go into the property – i.e. that they just did a “drive by” - but these claims are rare and hard to prove.
Comparables
However, a Whistleblower TV documentary in 2006 did show one agent making up “comparables” to show surveyors – in other words making up imaginary properties in order to try to pressure a surveyor to agree to a high price for their vendor client.
Costs for a Valuation Report will depend on the value of the property. About £250 to £300 will be typical for a £200,000 property right up to about £800 for a £1million property.
Fees do vary across lenders so it’s worth asking when you call for a mortgage quote.
Middle Ground
The Home Buyer Survey and Valuation is a sort of middle ground between a basic Valuation Report and a full structural survey and will cost from around £300 upwards, and will take about two and a half hours for a three or four bedroom house.
As well as giving you valuation information, this more detailed option will give you information on condition of the property and although not as detailed as a full structural survey it will look at any matters that need attention such as whether you need further tests for things like damp or for woodworm infestation.
Full Structural Survey
Then there is the more detailed option -the Full Structural Survey - which will cost from £650 upwards depending on the size of the property.
Surveyors have to tell you what they have found and the full structural survey report is detailed and will tell you exactly what is wrong and what you should do to put them right.
It will also set out approximate costs for any essential repairs and the report may divide the repairs into “urgent”, “significant” and “observational” matters.
Most people would recommend going for a HSV if you are buying a larger home and you want more reassurance.
The Full Structural Survey would be better for older properties and listed buildings and for buildings that may have been altered significantly.
Arrange Your Own Private One
Usually, for valuation reports (and occasionally for the middling home buyer survey) the lender will just appoint a local surveyor from its panel using a quite automated process.
Try to get the mortgage lender to accept a survey or valuation you have arranged direct with a surveyor. One good trick is to say you have had one done already. Doing this will save you the ludicrous approx 40% that the lender will load on top for their “admin”
Before you appoint a surveyor, check that they are a member of the Royal Institution of Chartered Surveyors (RICS) -see contact details below.
For a Full Structural Survey you should convey before hand if there are any areas you particularly want him to look at.
However, you will not usually be able to make any special requests for the basic Valuation Report.
To find out more about surveys or any other aspect of buy to let and property investment ask me.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
LettingFocus.com are the buy to let experts and I’m David Lawrenson, the author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.
We help landlords and property investors make money in property by coaching them in ways that work and which are of minimal risk.
I have been a landlord and property investor myself for over 25 years.
At LettingFocus we offer independent unbiased advice for landlords and property investors on a one to one mentoring and coaching basis as well as through occasional group seminars.
You should know that property clubs and property advice in the UK is still mainly unregulated and advice is often poor.
With no link to property firms, developers or bridging loan providers we at LettingFocus can give unbiased independent advice on where and what type of property to buy for investment, when to buy and how to buy property at a low price.
We also show you how to manage tenants properly and in ways that take up as little of your time as possible.
CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS on a range of products for landlords too, click here: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A SITE AND YOU LIKED THIS PIECE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!
Have You Seen this article on mortgage brokers: http://www.lettingfocus.com/pages/myarticles_UsingMortgageBrokers.html
WANT TO ADD A COMMENT OR VIEW OLD COMMENTS?
To add a comment to this post, simply click on “link to this post” to add your comment and to view comments of other people.
Copyright: David Lawrenson 2007.
It’s done for the mortgage lender (not you) in order to see whether the property is worth the amount that you want to borrow by way of a mortgage loan.
Normally, the report is sent straight through to the lender and the first you will see of it may be when you receive the mortgage offer.
Of course, if the valuation reveals that property is not worth enough for the lender to make the loan, then no mortgage offer will be forthcoming and you will have to go back and re-negotiate the price with the vendor or take out a lower loan and put in more equity yourself.
The Valuation Report may take as little as 30 minutes to do for a smaller property and information is normally quite minimal. Some agents have even said to me that they thought some surveyors did not even go into the property – i.e. that they just did a “drive by” - but these claims are rare and hard to prove.
Comparables
However, a Whistleblower TV documentary in 2006 did show one agent making up “comparables” to show surveyors – in other words making up imaginary properties in order to try to pressure a surveyor to agree to a high price for their vendor client.
Costs for a Valuation Report will depend on the value of the property. About £250 to £300 will be typical for a £200,000 property right up to about £800 for a £1million property.
Fees do vary across lenders so it’s worth asking when you call for a mortgage quote.
Middle Ground
The Home Buyer Survey and Valuation is a sort of middle ground between a basic Valuation Report and a full structural survey and will cost from around £300 upwards, and will take about two and a half hours for a three or four bedroom house.
As well as giving you valuation information, this more detailed option will give you information on condition of the property and although not as detailed as a full structural survey it will look at any matters that need attention such as whether you need further tests for things like damp or for woodworm infestation.
Full Structural Survey
Then there is the more detailed option -the Full Structural Survey - which will cost from £650 upwards depending on the size of the property.
Surveyors have to tell you what they have found and the full structural survey report is detailed and will tell you exactly what is wrong and what you should do to put them right.
It will also set out approximate costs for any essential repairs and the report may divide the repairs into “urgent”, “significant” and “observational” matters.
Most people would recommend going for a HSV if you are buying a larger home and you want more reassurance.
The Full Structural Survey would be better for older properties and listed buildings and for buildings that may have been altered significantly.
Arrange Your Own Private One
Usually, for valuation reports (and occasionally for the middling home buyer survey) the lender will just appoint a local surveyor from its panel using a quite automated process.
Try to get the mortgage lender to accept a survey or valuation you have arranged direct with a surveyor. One good trick is to say you have had one done already. Doing this will save you the ludicrous approx 40% that the lender will load on top for their “admin”
Before you appoint a surveyor, check that they are a member of the Royal Institution of Chartered Surveyors (RICS) -see contact details below.
For a Full Structural Survey you should convey before hand if there are any areas you particularly want him to look at.
However, you will not usually be able to make any special requests for the basic Valuation Report.
To find out more about surveys or any other aspect of buy to let and property investment ask me.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
LettingFocus.com are the buy to let experts and I’m David Lawrenson, the author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.
We help landlords and property investors make money in property by coaching them in ways that work and which are of minimal risk.
I have been a landlord and property investor myself for over 25 years.
At LettingFocus we offer independent unbiased advice for landlords and property investors on a one to one mentoring and coaching basis as well as through occasional group seminars.
You should know that property clubs and property advice in the UK is still mainly unregulated and advice is often poor.
With no link to property firms, developers or bridging loan providers we at LettingFocus can give unbiased independent advice on where and what type of property to buy for investment, when to buy and how to buy property at a low price.
We also show you how to manage tenants properly and in ways that take up as little of your time as possible.
CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS on a range of products for landlords too, click here: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A SITE AND YOU LIKED THIS PIECE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!
Have You Seen this article on mortgage brokers: http://www.lettingfocus.com/pages/myarticles_UsingMortgageBrokers.html
WANT TO ADD A COMMENT OR VIEW OLD COMMENTS?
To add a comment to this post, simply click on “link to this post” to add your comment and to view comments of other people.
Copyright: David Lawrenson 2007.
Labels: mortgage valuation, mortgage valuation report, structural survey, surveyors, surveys
This entry was posted by lettingfocus, on
Monday, August 20, 2007.
