Some people – particularly first-time buyers – can get confused between a mortgage valuation and a full building survey. At Anderson Associates, who offer property surveys in Suffolk, Essex, Kent and parts of London, we explain the differences between the two and why we would always recommend a full building survey.
It’s Intended for You
A mortgage valuation is not a survey; it’s for the mortgage company or lender to confirm in their opinion if the property is worth what you are paying for it and that it is mortgageable. They will also be looking to provide an Open Market Valuation, which will give a realistic idea of what the property is worth in the current market. You may have to ask to see the mortgage valuation report – don’t automatically assume that you, as a prospective buyer, are entitled to a copy.
A full building (Level 3) survey doesn’t usually include a valuation, unless specifically requested.
There are other advantages. It’s written for you, not the mortgage company; and as the person commissioning the report, it will definitely be sent to you.
It’s More Detailed
Mortgage valuations are very limited in detail, particularly when it comes to the structural condition of the property; they may only highlight the more obvious or significant defects.
Full building (Level 3) surveys, by contrast, look at internal and external areas of the property, highlighting any evidence of structural movement such as subsidence (both historic and active), timber defects, and any issues relating to dampness and the roof. If any of these are covered in a mortgage valuation survey, they won’t be mentioned in as much detail.
In addition, any of the above issues are raised and likely to affect a mortgage offer, they will request further investigations, as a condition of the mortgage.
A mortgage valuation can take a matter of minutes for smaller properties (although generally it takes longer than that). They can also be conducted remotely or virtually – although in most cases the valuer needs to visit to provide an accurate assessment of the property’s worth.
A full building (Level 3) survey can take anywhere from two to three hours or more, and the resulting report is significantly longer and much more detailed than a mortgage valuation.
A mortgage valuation may be provided free as part of the lender’s mortgage offer, while a full building survey is an additional expense for which the buyer will have to pay for. However, the additional outlay is well worth it. Not only will a full (Level 3) building survey give you an idea of any less obvious defects, particularly in older or period properties, but ours also include a summary of costs if any remedial work is needed. (Not all Level 3 surveys include this)
So, a Level 3 survey could end up being cheaper in the long run if you end up saddled with expensive and unexpected repair bills; and you may be able to use the survey report as the basis to renegotiate the asking price of the property to cover some of the cost of any remedial work required.
Also, in a struggling property market, mortgage valuations may be cautious, coming up with a lower property value. Although this reduces the lender’s risk it could pose problems for the buyer if the property is not deemed to be worth the amount they are due to pay for it.
Unless you can renegotiate the price with the seller, you will have to make up the shortfall in the valuation/mortgage offer with an increased deposit.
Property Surveys in Suffolk from Anderson Associates
Anderson Associates recommend our Level 3 full building surveys, whether you live in Kent, Essex, Suffolk or London. These are comprehensive reports and should identify any structural problems or other major issues.
The list of repairs and maintenance works are included in a cost summary at the end of the report, together with an indication as to what it will cost to put them right. Not all Level 3 (Building) Surveys include this. The Level 2 Survey is much less detailed that the L3 and definitely won’t include the cost summary.
You can reach us on 01473 623656 if you would like to learn more about any of our services, or follow this link and fill in the online form.