What does a mortgage surveyor look for

What is a Mortgage Valuation?

A mortgage survey is a real estate survey that reveals a wealth of information about potential problems. It is the valuation of the property you would like to purchase. Other real estate surveys reveal different levels of information.

What a Mortgage Surveyor look for?

When applying for a mortgage loan, your lender will commission for a property valuation. The valuation is done to determine whether the property being purchased will be adequate security for the loan requested. The report also advises the lender of any significant defects that could affect the value of the property in the coming years.

Mortgage valuations take approximately 15 to 30 minutes. They are brief and give non-comprehensive information about the condition of your property. The valuation is primarily for the benefit of the lender. Therefore, they make sure the value of the property is worth the risk of investing.

Mortgage lenders send valuation experts to assess the property to determine if it is worth the amount you are negotiating and if the loan needs to be mortgaged. These range from a drive-by assessment to more detailed real estate inspections.

Please note that the evaluators are only interested in matters that may affect the protection of mortgage lenders. Mortgage valuations do not have to reveal structural problems. The lender should know that the loan can be charged.

Although you may pay for the report, it is unlikely that they will give you a copy. Yet the property may have problems, but this will not appear in the appraisal report. We, therefore, urge all users to conduct their own independent investigations and to discuss them further with investigators.

How much does a mortgage valuation cost?

The cost of mortgage valuation depends on the size of the property. The cheapest option charged by a mortgage lender ranges from £120 to £350 depending on the type of property, the number of bedrooms, the purchase price or the specific credit.

Other types of House Surveys and What They Cover

A house survey differs from a mortgage valuation. It is an assessment of a property by identifying any major issues. House surveys are mainly for the benefit of prospective buyers as they tell the condition of the property before acquiring it. Just looking cannot interpret most of the details that make up the state of the property. The method for determining the true condition of a property should be from the actual inspection during an official property survey.

The land surveyor can tell you what kind of real estate survey meets your needs. By choosing the most appropriate type of property survey, you will avoid many problems related to buying a property.

Being conversant with the house problems will enable you to budget for repairs or decide whether to purchase the property. You may also be able to renegotiate the price with the owner or the vendor. Below are other types of house surveys.

Homebuyer’s Report

The HomeBuyer report, also known as the Homebuyer Survey, is a good choice if the property you buy seems to be in a decent state and has not transformed since construction. Surveyors examine only reasonably accessible areas. The subsequent report will help you decide on whether to buy the property or if it is priced correctly.

There are two options in this type of survey: to include the survey with or without a property valuation. A survey will only inform you of any major problems such as rot. A survey with valuation will provide details on major problems, a valuation, and an insurance reinstatement. Prices range from £400 to £1,000, depending on the type of property.

Full Building Survey

A comprehensive construction study is designed to identify all asset deficiencies and provide recommendations for maintenance costs, remediation and capital requirements. The depth of the investigation depends on the identification of fundamental problems and major deficiencies in all types of buildings. However, more specialized investigations point out serious damages and very rare problems.

Whether a sales price is agreed with a supplier, a freeholder or an owner, a comprehensive construction study is often a valuable bargaining tool. The details in the report may support requests to carry out certain repairs or reduce the purchase price before transferring ownership.

Building Survey

Building studies, also known as structural studies, require more comprehensive and detailed inspections and assessments of the interior and exterior of the building structure, both visual and non-visual. Such investigations are strongly recommended if the property is obsolete and made of materials without form work (such as wood), aging or significantly renovated facilities or if major structural changes or work in progress take place.

This includes checking all accessible areas such as the roof, basement, and ground. Also, being aware of issues that affect the structural integrity of the building, such as rot problems, dry rot, woodworm invasion, or potential hazards such as a big tree close to the building.

At the end of the audit, there will be a report detailing all the information the interviewer thinks you should know about your property. The report lists all identified defects, possible causes, significance (if immediate action is necessary or temporarily negligible), and suggest the recommendations to correct them. It also includes technical details on building construction, materials used, etc.

Surveyors conducting this type of house survey have no standard format that they follow. Each investigator has his own way of reporting. The survey also excludes evaluation unless specifically requested by the surveyor.

RICS status report

This is a cheap version of Home Buyer’s report and does not include ratings. The RICS status report is designed to show the status of the property and to supplement the information provided in the mortgage valuation survey.

RICS evaluators and those who have not taken part in the RICS Evaluator Registration Program can conduct the survey.

What are the costs of house surveys?

The key information provided by housing surveys far outweighs the cost of HomeBuyer reports and building surveys in relation to the required repair price.

Construction surveys (or “structural surveys”) are the most comprehensive and therefore the most expensive. Prices in the VAT range from £500 to £ 1,300. It may seem like a lot of money, but if you are investing in problematic real estate, you may realize a lot of savings. Minimize risk, make informed decisions about real estate purchases, and most importantly, give yourself peace of mind.

How to find a surveyor

Residential surveyors range from individual groups to large companies, regardless of your clientele; they are registered with industry associations such as the Royal Society of Chartered Surveyors (RIC) and the Real Estate Surveyors Association (RPSA).

Sometimes, a real estate agent or mortgage lender may recommend an expert, but agents or lenders often receive commissions before they make recommendations.

If you would like a quote for home survey click here for instant quote.

What is the Difference Between Under Offer and Sold Subject to Contract

 

Under offer Sold subject to Contract

 

Under offers is a term used by estate agents and means that an offer has been put to the seller and accepted, but will normally be below the asking price.

Sold Subject to Contract (STC) is really the same thing an offer has been accepted by the seller, but the paperwork has not yet completed.

Under offer refers to a marketing and advertising term commonly applied by estate agents. It simply implies that an offer made earlier has been accepted. So what is the primary variance between sold and under offer when talking about contracts?

There is a need to begin by understanding that Sold subject to Contract simply refers to one thing. Under Offer in this regard means that an interested buyer finds a certain property interesting, and is, therefore, willing to put in a bid for it. Often, the offer made by the buyer will be below the price set by the seller. It is what is implied by the term ‘under offer.’

It means that the person looking to sell that property is yet to make a decision on whether they will accept the offer from the interested buyer or not. In the event that the seller becomes intrigued with that offer and chooses to accept it, then the estate agent refers to the property as Sold STC or Sold subject to contract.

Note that the acceptance does not mean that the paperwork has been processed. At this stage or at this moment in time, the only thing that the buyer has done is to accept an offer. Other interested buyers are, as such, welcome to continue making inquiries about the property. A sale will only be considered complete when all parties involved come together and sign the contracts. The contracts will then need to be exchanged.

What this means

If you are interested in a property that is listed as under offer or Sold Subject to Contract, then you can still purchase this property with a higher offer. It will then be up to the buyer to decide if they wish to go with the higher offer or stick with the current buyer.

The seller needs to weight up the decision which will not only be about price. If they have accepted an offer and the sale is well under way, even if they get a slightly higher offer, they may well wish to stay with the current purchaser. If however the new offer is substantially above the current offer or the new purchaser can move more quickly than the current purchaser they may accept the new offer.

The property is only sold when the contracts have been exchanged, so up until this point the seller is free to take new offers.

Market Statistics

According to current property statistics, close to 15 percent of all properties sold subject to contract will at some point come back to the market. The reason why this happens is that the seller and the buyer are unable to agree on the sale terms. Failure to agree means that a property will eventually get listed once again.

From the explanation given above, it is clear for all to see that the existing difference between under offer and Sold STC is pretty self-explanatory. As such, an interested buyer should not be afraid to make inquiries about a property Sold STC. While a property may already have been indicated sold subject to contract, it may come a time when:

  1. The person who bought the property is not impressed with the information that pops up in local searches.
  2. A mortgage application fails to go through forcing the buyer to cancel the deal

III. A survey conducted by the buyer or their representatives return back data and information that complicates a mortgage application

The Scotland Case

One thing to note is that the system used in Scotland is quite different. Unlike in other locations, any purchase offer made by a prospective buyer immediately becomes legally binding as soon as it is made. In short, Scotland does not have the Subject to Contract stage.

From time to time, the paperwork process in Scotland or missives as they are known may fail to work for a certain transaction. In such an eventuality, there is what is referred to as Sold STCM or Sold Subject to Conclusion of Missives. For estate agents, it means that they have no option but to ensure that they pass on all the offers they receive on a given property.

Here, all offers made on a given property are in many cases the result of a survey process, satisfactory contract, and mortgage approvals. Therefore, the estate agents are legally required to ensure that they pass on all the information and offers they receive from potential buyers. This is regardless of what they may think about the offer that has been made.

The only time this is not applicable is when the estate agent has in their possession a signed letter from the person selling the property. The letter should state that no information or offers below a certain figure should be passed on to them by the estate agents. The signed letter from the seller will mean that an estate agent has been released from passing on all offers.

Estate agents in Scotland are also expected to ensure that the property owners have been informed about all existing offers. This will include making a written confirmation to the seller. The written confirmation has to occur as soon as possible, without any dilly-dallying from the estate agent. Simply put, an agent is legally required to send the written confirmation within the same business day.

Conclusion

Having looked at the case in Scotland and elsewhere, you should now have a better understanding of what Under Offer and Subject to Contract terms mean. They are terms that anyone looking to purchase properties in Scotland and other areas will come into contact with before the close of a transaction.

Another essential thing to note is that Subject to Contract and Subject to Conclusion of Missives are two similar terms. But despite their similarity, they are different in their application due to the presence of legal requirements. Requirements that dictate what an estate agent can and cannot do when representing a seller.

What a Brexit means for the residential property market in the UK

As the UK prepares for the EU referendum to still take action, uncertainty is still lingering about what a Brexit would mean for the property market

Brexit, should Britain actually leave the EU. The question is if there is going to be any impact on the residential property market.

“If we stay in, it’ll be back to business relatively quickly. If we leave, I don’t think anyone has quite worked out what all that means, other than more uncertainty,” said Richard Donnell, director of research and insight at Hometrack, a property analyst, to IBTimes UK.

There are two sides of the coin when it comes to the property market. You can have a young couple looking to buy their first time home to a Multi millionaire investing in a £30m flat in central London. A Brexit would affect them both differently. We are going to look at the first example.

When it comes to the average person looking to buy a domestic house or flat, Brexit may not have much of an impact. “As far as domestic supply and demand are concerned, I’d say there aren’t that many major risks, other than if interest rates go up faster, or more than currently expected,” said Stephen Williams, an equity analyst at the investment manager Brewin Dolphin, to IBTimes UK. “We’ve still got this demand and supply imbalance and I think the demand is still there, supply is still limited. From a domestic point of view, I don’t think Brexit is going to have a significant impact at all.”

Donnell said he can’t see the long-term fundamentals shifting because of a Brexit. House prices are largely informed by people’s incomes. So, Donnell said, the Brexit question when it comes to housing is whether it will affect the trajectory of incomes growth. “Long-term, I can’t really see the material difference,” he said. “But, if the government wants to build more homes, wants to create a stable housing market environment with more mortgage lending, more investment in housing, attracting external sources of investment into housing… then uncertainty and turmoil mean you might not get as much investment as you necessarily might get with stability.”

In the short-term at least, the uncertainty will likely suppress activity in the housing market. Donnell of Hometrack analysed the Scottish property market in the tumultuous 18 months prior to the independence referendum in September 2014. He found a 10% drop in transactions compared to what could have been expected had there been no referendum. A key difference, however, is that the lead up to Brexit is something that is hard to predict.

“I think it’s a short, sharp campaign,” Donnell said. “If we take the Scottish example, it’s bound to have some impact on levels of market activity. Market activity has plateaued in the last year anyway. Transaction volumes in the last year for housing have flatlined, more or less, and fallen in parts of London and the south east. So this will just add to the view that there’s going to be a slowdown in house price inflation on lower activity. But because we’ve got a shorter, sharper campaign, hopefully the impact is going to be less pronounced.

“I think the level to which the debate really cuts into jobs, the outlook for your income, possibly mortgages — the more the debate becomes about economic consequences of in or out, and the more it resonates with people and their own financial decision-making, then I think the greater the impact will be. It will really be a turnover impact. It’ll just mean people don’t participate in the market until it’s resolved.”

 

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Should we pay off our mortgage in full?

There have been a lot of debates on this over the years, and the main reason for keeping a small amount on your mortgage was that the lender would carry on holding the mortgaged property’s title deeds safe.

The other benefit was so the borrowers would avoid paying an administration fee to the lender for the return of the title deeds when the mortgage was paid off. This fee is called redemption administration fee, deeds fee or and exit fee and cost between £50 to £300.

The truth is that due to a high percentage 80% of properties being registered with the Land Registry it is unnecessary to need the physical title deeds as its held in digital form for properties in England and Wales.

You can check here, if your house is registered with the Land Registry and if so you don’t need to have hard copies of the title deeds to prove you’re the owner of the property. So it’s safe to repay the whole of your mortgage and have your title deeds returned to you (assuming that your lender actually has them).

However, if you owned your house pre 90’s and haven’t mortgaged since you could be unregistered and therefor should keep the title deeds in a safe location. And you’ll need them if you choose to register your house voluntarily.

Registration of property in England and Wales is compulsory when you buy, inherit, are given, or take a mortgage out on a property. Land registration is dealt with by the Registers of Scotland in Scotland and by Land and Property Services in Northern Ireland.

 

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Do I have to use a local conveyancing solicitor?

All to often homeowners are told by estate agents that if they use their conveyancing service the process will be much easier and quicker. This however is hardly ever the case, and in most cases is considerably more expensive.

In Short

You do not need to use a local conveyancing solicitor, as there are solicitors in London that service clients right across the United Kingdom with no problems.

Using the convenience of the internet and many processes involved in conveyancing are now performed over email and via post, there is no need to visit a conveyancer’s office.

Choosing the right Conveyancing Solicitor

Although we are recommending that you don’t need to choose a local solicitor, we are not saying use the first solicitor you find. Below are some of the questions you might want to ask your prospective conveyancing solicitor.

  • How long have they been providing conveyancing?
  • Are their fees fixed?
  • Can they provide an online quote?
  • Do they offer 24/7 support or only during office hours?
  • If you end up not moving, do the solicitors still take a fee?
  • Do they offer other services such as remortgages
  • Do they offer Home Buyers Protection on every purchase covering you for up to £2250 in fees spent if your buyer pulls out through no fault of your own?

If they can answer all the above questions to your satisfaction, they could be worth using. However why not get an online quote from us and see how much you could be saving.