Mortgage Broker Q&A – What is a basic valuation for mortgage purposes and what other types of survey are there?
Most typical purchase mortgages and many remortgage products will include a fee for a basic valuation.
This valuation is not for the buyers benefit and doesn’t protect you in the event of a property defect or if work is subsequently required for things like damp treatment or subsidence.
You are paying for some form of valuation to satisfy the lender that the property being mortgaged is suitable security for the loan. The surveyor owes no duty of care to you as the buyer despite the fact that you pay for it.
Many borrowers believe that this basic valuation is suitable evidence that the property is in a good state of repair, and many have found out in court to their dismay that this is not the case.
Some basic valuations will not even involve entering the property it may just be a “drive by viewing” or even performed on an AVM or “Auto Valuation Model” which is a computerised average.
Many lenders will offer either a homebuyers report or a full survey as a form of extra or upgrade to the basic valuation. These survey types do offer you some legal protection and do entitle you to a duty of care from the surveyor in question.
A homebuyers report should identify major problems and structural defects, where as a full survey should be very thorough and identify any serious issues including electrical and dry rot problems etc.
If you buying a property and you want to know that the property is structurally sound then don’t rely on the basic valuation to protect to you because unfortunately it will not.