One of the most important elements of the property purchase or property finance journey, but perhaps the most overlooked. Property surveying is an essential part of the home finance narrative arch, but unfortunately a lot of people are completely in the dark about what surveyors do and why they are so needed. So if you are sitting there scratching your head, asking “What do property surveyors do?”, then this blog is well worth your time!
What Does A Property Surveyor Do?
Essentially a surveyor is an organisation or usually a specific person within an organisation whose job it is to assess a property and in the context of mortgages, they put an accurate valuation on a property. This is to ensure that a property is A) Suitable to mortgage and B) Worth what the person is either purchasing it at or claiming it is worth. A surveyor will then write up their findings and observations in a valuation report, and this will be used by the mortgage lender to determine if they are willing to lend you the mortgage that you have requested.
A surveyor would normally be a qualified person working either independently or as part of a surveying firm and will be qualified under the Royal Institute of Chartered Surveyors (RICS). This means that they have studied for an passed examinations administered by a regulatory board of surveyors and completed the necessarily work and experience that it takes to become a qualified and trusted surveyor.
How Do Surveyors Value A Property?
This is a very open question and doesn’t really have one uniformed answer. Different surveyors will look for different things depending on their firm’s practices and also the purpose and main focus of their investigations. So how does a surveyor value a property?
Generally, a surveyor will look at the following when assessing a property:
- The overall condition of the property. This is big as if the property is in a bad state of repair, this could mean that the value of the property is severally impacted, or in the worst case scenario, unmortgageable.
- They will also do some research into the property itself and it’s history. They will look at approximate date that it was built, the number of liveable rooms, how energy efficiency and environmentally friendly it is, the location of the property and it’s surroundings etc. All of these elements are very important to the surveyor’s assessment as the age of the property will impact value and condition. The number of rooms of course adds or removes value. How energy efficient the property is a really important issue, especially in 2023 as most people are conscious about energy prices. And finally, the location of the property is very important as it will impact the desirability of it to potential buyers. For example, the value and desirability of a property built next to a nuclear power plant is much lower than somewhere located in the surrey hills!
- Once all elements in their own checklist have been assessed, they will then write up a valuation report based on their findings and observations and come to an educated estimation of the value. This will then be passed to the mortgage lender for one of their underwriters to consider.
- The valuation report in an ideal world will come back with no concerns about the property and the valuer would confirm that the value of the property is correct. However, this is not always the case and there are a couple of different outcomes.
Property Valuation Comes Back Lower Than Expected
- The valuation could come back at less than expected: In this case, a valuer has been to the property and made an assessment and determined that the property is worth less than quoted in the mortgage application. If you are getting a mortgage, a mortgage lender will normally accept a valuer’s valuation which means that there is generally no arguing against it. In this case, there are two things you could do. 1) Speak with the seller of the property (if you are purchasing) and see if you can negotiate buying the property at a lower price due to the valuer’s assessment. If you can’t come to an agreement with them, you will either need to walk away from the purchase or 2) Approach a different mortgage lender who uses a different surveyor and re-instruct a new valuation that might value the property higher.
Property Valuation Comes Back At Zero
- Sometimes a property valuation will come back as zero. Now this does not necessarily mean that the property is worth nothing at all, but it could mean a couple of things. 1) The property in this state is unmortgageable (as advised by the valuer to the mortgage lender). In this case, the valuer has suggested that the mortgage lender should not lend on the property as there are major issues with the property that will impact its value and saleability. This could be anything from major structural damage, Japanese knotweed infestation, subsidence, rot, you name it. In some cases, this could mean that this property will likely never be fit to be mortgaged and would likely need tearing down.
- Sometimes a property valuation report will come back with a value of zero, but with suggestions of necessary improvements needed before the valuer can come back and make a proper assessment. In this case, the valuer has observed several issues with the property that need resolving before they can give and accurate and fair valuation. This could be mould, water damage, some structural issues, electrical wiring faults etc. Usually if these issues are resolved, you can re-instruct the valuer and they will carry out another assessment.
How Much For A Property Surveyor?
In the case of instructing a surveyor for a mortgage, most mortgage lenders will have their own trusted surveyor on panel. This means that they will have a surveyor firm that they work with who they trust to carry out valuation on their behalf. This is so that the lender can ensure that the property they are investing in by lending you money, is worth what you or the seller claims it is, so that they won’t lose out on money if they have to repossess and re-sell the property in the future. It is also to make sure that the property they are investing in with their mortgage loan is in a good state of repair and isn’t likely to have any major issues that could again, cause them to lose money.
How much is a property surveyor? Because surveyors often work with specific lenders, there are a lot of mortgage products that you can choose from that offer free valuations as part of the package. This way you won’t be charged anything for the valuers work. Normally the lender will pay the valuer in an agreement between the two businesses. However, this is not always the case. Generally if you choose a mortgage product that does not offer free valuation, you will need to pay for the valuation, even if they are the lender’s preferred surveyor. In a nutshell, how much do property surveyors cost? Different valuers charge different fees but they are generally around £100 to £200.
You can also have the option of instructing your own valuer too but this can be much more expensive. Instructing your own valuer could cost multiple hundreds of pounds if not more.
What Is A Commercial Property Surveyor?
Most people will not need to concern themselves with a commercial property surveyor when buying a property, as they are reserved for valuations and assessments on buildings or units used for commercial reasons such as shops, office buildings, pubs, restaurants. What does a commercial property surveyor do that is different to a residential property surveyor? Honestly, the two roles are very similar and there are only a few differences really. A commercial surveyor is completely concerned with commercial properties so assists in valuing commercial buildings that are going to be sold or are going to be rented out.
A commercial surveyor will go out and survey a building, checking similar elements to a regular surveyor, but will also look at things like the functionality of the property as a building, the area that it is located in for profitability and business, and make sure that it is being properly used as a place of business. A commercial surveyor might be instructed by a commercial mortgage lender or someone selling/buying a commercial building but they can also be instructed by a landlord who is hoping to rent out the building to a business. The valuer will check the realistic and predicted rent on the property based on the location and building features. The landlord can then ensure that they are charging enough and not too much to potential tenants.
What Do Surveyors Look For When Valuing A Property?
We’ve already slightly covered what do property surveyors check above already, but here is a bit more of an in-depth look at some of the specific things that surveyor look for.
- Inside, surveyors will generally look at things like the roof, ceilings, walls, floors, fireplaces if you’ve got them, chimneys, staircases, woodwork and bathroom fittings that are not moveable like fixed sinks and toilets. The roof will be checked for the safety of the structure, leaks and rot. The same with walls and ceiling to make sure that they are in a good state and not likely to cause any issues or have any threats to occupier safety. Woodwork will be checked for things like rot and woodworm. Bathroom fittings will be checked for functionality, safety, quality etc.
- Outside the property, the surveyor will look at the roof, chimney stacks, guttering, walls, windows, doors. Again the structural safety and quality of all of these things will be assessed to make sure that everything is safe, in a good state and functional.
- The surveyor will check utilities like water, heating, electricity, gas, to make sure they are energy efficient and there are no issues with connectivity.
- For most properties but especially larger plots of land, the surveyor will check boundaries, fences, dividing walls, outbuildings etc.
This is not an extensive list and as we have already mentioned, different surveying firms will check different things. The purpose of the mortgage loan and the type of property being assessed will also dictate what the surveyor feels they need to check and how in-depth the valuation will need to be.
How Long Does A Surveyor Take To Value A Property?
When asking how long does a surveyor take to survey a property, it is important to know the distinction between an in-person valuation and a desktop valuation. An in-person valuation is pretty self explanatory, however a desktop valuation might not be something that you have heard of. Increasingly more commonplace since the covid-19 pandemic, desktop valuations are valuations carried out on properties without the valuer actually visiting the property itself.
This can be for a number of reasons but is essentially done if a full valuation is not possible at the time (In the case of new builds for example) and for ease and time efficiency if a property isn’t particularly risky to lend on or much of a concern for lenders. Desktop valuations are normally done by the valuer doing their own research into the property based on information that is available publicly online. If surveying a new build, a site tour may be taken later down the line or an assessment of a show home may also happen.
In-Person vs. Desktop Valuation
Now that we know the difference between an in-person and a desktop valuation, we can look at the time taken. With an in-person valuation, of course a physical person has to make the trip out to the property and carry out the survey. Arranging for someone to visit the property can take a week or two to arrange once they have been instructed.
The valuer can then be at the property anywhere from half an hour to several hours depending on how in-depth they need to go. With a desktop valuation, this as you can imagine can be much quicker as the valuer doesn’t even need to leave their desk! Depending on the workload of the valuer, this can be done in a matter of days.
Why Is Getting The Right Property Surveyor So Important?
Getting the right property surveyor is extremely important, especially when arranging a mortgage. Although, as we’ve already mentioned a lot of lenders will have their own surveyor who they trust as an experienced and professional valuer. If you are going to instruct your own surveyor, you need to make sure that they are RICS qualified and are a well known firm. This should ensure that you will get a good quality of service and they will check and assess all the necessary elements of the property. If you instruct a non RICS qualified surveyor or a small firm with no reviews and very little internet presence, you could end up getting a sub par valuation.
You must also check their fees and the small print in their terms and conditions before instructing them. As we have mentioned already, some valuers and valuations can be very expensive, so you want to make sure that what you are paying is worth it. It is important to get a quality valuer to carry out a quality valuation as you will be able to know for sure that you aren’t overpaying for your property and that there aren’t any major issues with the home that could cause issues later down the line.
How To Hire A Property Surveyor
No idea how to find a property surveyor? Luckily most lenders will have a recommended surveyor or several surveyor firms on their panel to choose from, so finding a survey is generally not too difficult a task. But, if you are struggling to get a surveyor, the best thing to do is speak to your mortgage advisor.
As well as helping you to secure the best mortgage possible, your advisor can also recommend tried and tested surveyors that they also trust to provide you with a quality valuation on the property for a reasonable price. Your advisor can also recommend legal representation like solicitor recommendations.
So that is pretty much everything you need to know abut what a surveyor does, how to find a good property surveyor, how surveyors value properties, and the importance of surveying in the mortgage process. If you or anyone you know is either looking to purchase a property or are looking to re-finance their existing home and needs mortgage a surveying advice, please give our team a call today. We are here to help.