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Before you buy or build a home, you should consider something most people don’t: a survey. No, this isn’t a questionnaire about your favorite T.V. shows or restaurants. It’s a land survey. Here’s what it’s all about and why it’s so important.
What Is A Survey?
According to this surveyor guide, a survey is a property health check. It’s done by an individual looking to buy a home, and performed by a qualified professional certified to do an inspection. The survey will tell you about the valuation of the property, give you a basic idea of the structure and integrity of the building, provide you with both basic and detailed information about issues with the home or property, and provide you with recommendations on what might need to be fixed.
Surveys are usually done by homeowners making large property purchases, but they can (and probably should) be done by everyone, especially if you’re taking out a mortgage to buy the property.
The survey is different from a valuation done by a bank. With a survey, you hire an independent surveyor to come out to the property and inspect it on your behalf. Because of this arrangement, and because you’re the one paying the surveyor, they work on your behalf and have your best interest at heart, not the banks and not the seller’s.
If you’re on the selling end of the transaction, of course you can also hire a surveyor to tell you about the condition of your home before you put it on the market. This can actually help you get a better price for the property.
Preparing for the survey can sometimes be a little tedious, but it will help the surveyor get a more accurate picture of what’s going on with the home. If possible, pack up your belongings and stow them away so that the surveyor has unimpeded access to the home (and also so that he or she doesn’t disrupt your possessions when looking for common problems).
Why You Should Get One Done
A mortgage valuation isn’t enough anymore. Mortgage valuations are used by lenders to confirm what the property is worth. It’s also used as a way to secure the loan for the bank. But, the mortgage valuation doesn’t say anything about the land, any structural problems on the property that might be costly to fix, or the condition of the foundation.
Most conveyancing solicitors will tell you that you must get a home survey with a Chartered Surveyor before you agree to buy the property instead of simply relying on the lender’s mortgage valuation. Remember, the lender doesn’t want to lose money, but he is securing your land and your paycheck (in a sense) for that loan.
You can be foreclosed on, and the lender usually forces you to buy private mortgage insurance if you don’t put a lot of money down (less than 20 percent), so he’s covered if you don’t repay. You’re not covered.
Another reason why you should consider a survey is that this is a huge purchase – probably the largest one you’ll ever make unless you buy a business. A survey is relatively inexpensive by comparison, and it will protect you. After you’ve spent a large sum of money on a piece of property, you wouldn’t want to find out that there was something wrong with it, would you?
A survey tells you about the true condition of the home, and the land it’s on. A Home Buyer Report tells you the important issues and details that could affect the value of the property. Meanwhile, a Building Survey is a longer report that provides a comprehensive reporting of the building’s construction, its condition, and what has been extensively altered. It will also tell you about issues that may affect the value of the property.
The main difference is the level of detail.
Regardless, both types of surveys and reports give you leverage in negotiations with the seller and point you in the direction of where you need to go in regards to possible repairs. If the survey uncovers something serious, you can renegotiate the terms of the sale with the seller and avoid financing a part of the home that would need repairing.
This not only saves you on the purchasing price, but the long-term cost in interest payments. At the end of the day, it’s about peace of mind and making better financial decisions through superior actionable information.
Lucas Coleman is a real estate agent. He enjoys sharing what works for him online. Look for his posts on real estate and investing blogs.