Valuations and surveys
This content applies to England only.
Housing laws vary between England and Scotland. Get advice relating to Scotland
After you accept an offer, the buyer's lender will send a qualified valuer to assess the value of the property. This will help the lender to decide how much the buyer can borrow. The buyer may also choose to have a survey or homebuyer's report carried out to assess the condition the property is in.
What the inspection includes
How much information the buyer will get depends on how much s/he is prepared to pay for the inspection. The buyer pays all the expenses involved.
Valuations, surveys and homebuyer's reports provide different levels of detail:
- Valuations assess the approximate value of the property. They have to be done by someone approved by the buyer's lender. The buyer is unlikely to get a formal mortgage offer until after this has been carried out.
- Homebuyer's reports give an indication of the general condition of the property but do not provide as much information as a full survey. If the surveyor suspects that there are structural problems, s/he may recommend a more detailed inspection of all or part of the property.
- Surveys are the most detailed type of assessment and the most expensive. They are more likely to spot structural or other defects such as dampness and condensation, subsidence or woodworm. However, they don't usually cover plumbing, heating or electrical wiring in any detail. In many cases, surveyors recommend that a specialist is brought in to look at these areas.
At the very least, the buyer's lender will insist that a professional valuer assesses the property. If a survey or homebuyer's report is being carried out, this may be done at the same time.
How the inspection is carried out
The valuer and/or surveyor will contact you to arrange a date and time for the inspection. The amount of time it will take usually depends on the level of detail required and the size of the property.
The surveyor has to leave your home in the condition s/he found it. S/he can't disturb fixed items (such as fitted carpets or floorboards) without your permission. If you give permission for this, you should agree first that the valuer/surveyor has to put things back as s/he found them. You don't have to give permission but the buyer may be put off if you don't. If the surveyor needs to access neighbouring properties to assess the condition the property is in, you may be asked to arrange this.
What the valuation report will contain
The valuer will produce a written report saying how much s/he believes the property is worth and, therefore, how much the buyer will be able to borrow towards it. Copies will automatically be sent to the buyer as well as her/his mortgage lender and solicitor. If the valuation report says the property is worth what the buyer has offered, her/his lender will probably agree to provide a mortgage.
However, it may say that the property isn't worth the price that has been offered. This usually only happens if:
- it is overpriced
- expensive repairs are obviously needed
- the property is not a normal residential building (for example, it may be more difficult for buyers to get a mortgage on a flat above a shop).
If the problems are serious, the buyer's lender may not be willing to provide a mortgage for the property. It may hold back part of the loan until repairs have been carried out and inspected. This is called a 'retention'. Alternatively, the buyer may decide to pull out of the sale. S/he can do so at any time before contracts are exchanged, but if s/he has already paid a deposit it will not be refunded.
Surveys and homebuyer's reports
Most surveys and homebuyer's reports will indicate that some repairs are needed. Surveyors often point out the worst possible outcome of any problems they find, particularly with older properties. However, many repairs are relatively simple and inexpensive, and won't affect the property's value.
If the report says the property is in very poor condition and expensive repairs are needed, the buyer may be concerned. This might be the case if there is dry rot, subsidence or a major problem with the roof. You may be asked to get the problems fixed before the sale or to reduce the price. Your solicitor can do most of the negotiation involved in this as part of preparing the legal contracts. However, it can take a long time and may be difficult to agree the conditions of the sale.
