Many people know that at some point towards the later stages of completing on a sale a surveyor from your buyers lender will come round and view your home. What many people don’t appreciate is the importance of a surveyor’s opinion and how it can affect the sale. Also, there are certain measures that you can take in order to avoid a down valuation and these important points will be highlighted within this article.
Why will a Surveyor view your home
To put it plain and simply the lender would like to see what they are effectively buying. It’s the surveyors job to report to the bank that your property is structurally sound and what your property is worth. To put it bluntly the bank won’t be too pleased if they lent hundreds of thousands on a garden shed. Also, at a very bare minimum level they would like to see that the property actually exists.
Other than the valuation the surveyor will inspect your property with a fine tooth comb and will carry out various tests to ensure that your property is structurally sound. Any evidence of damp or if your property is of non-normal construction it could halt your sale and these important points with solutions are discussed at the bottom of this article.
How does the Surveyor determine the value
It is important to look at how a surveyor determines his value in order to avoid any down valuation. The surveyor will do some homework before he visits your property and will firstly look at what similar properties are currently on the market and at what price. He will apply even more focus with looking at historical prices achieved in your area as these are the real market values, not what someone’s hoping to achieve. With these pre prepared figures the surveyor will come to his final conclusion when actually viewing your house.
The Surveyor will prevent you from selling your property for more than it’s actually worth
Many people generously over value their home and if you are lucky enough to achieve a sale at a price thats more than it’s worth then you will likely receive a down valuation once the surveyor visits. It is the surveyors job to put a tick in the box that tells the bank that the property is worth at least what the buyer is paying. If the surveyor thinks it’s worth less he will manually conclude a figure. At this point your buyer will wish to re-negotiate as he probably won’t want to pay more than the house is worth and if he did then the bank would lend less and he would have to raise a larger deposit.
The Surveyor can see all the prices your house has been advertised at
That’s right, the surveyor can see if you have lowered the price and how many times. This is because industry professionals have access to a section of Rightmove called Rightmove Plus. This shows all the historical prices your house has been advertised at. If a surveyor can see that you have lowered the asking price on a number of occasions then it may give him the impression that your property is difficult to sell, this may cause a down valuation.
You can’t lower the price of home and change your mind
Think very carefully when reducing your asking price. Estate agents may initially generously value your home to gain your business and after a few months they may suggest that you lower the price. You may even choose to lower the price yourself. What you need to know is that each time you lower the price this establishes a new ‘fair market value’. If you ever changed your mind and put the price back up then the surveyor will likely see this when checking historical prices in Rightmove Plus. Unfortunately even if you achieve a sale at your higher price the surveyor will use the lowest price advertised. From the Lenders point of view they won’t pay £90,000 for your home if it was advertised at £80,000 last week!
Rather than just taking an estate agents view it may be wise to look at how competitively priced your property is through your own due diligence and looking at what the current asking prices are for similar properties in your area.
Evidence of Damp and what to do
A common problem that comes up time and time again is any evidence of damp within the inner walls. If damp is present then the lender will agree to lend once the damp is rectified, in this this scenario you will have to get any damp problem repaired and then the surveyor will visit once again. If you do suspect that damp exists in your home due to signs of mould on the walls or wet looking paint you may want to get this rectified beforehand as it will avoid wasting time in the precious closing stages of your sale.
What if your house is of non-normal construction
More importantly than any damp problem the surveyor would like to see that your property is built of ‘normal construction’. Unfortunately, it is currently very difficult to get any form of lending on pre fabricated houses or wooden framed houses (also ex- council high rise blocks). If you suspect that this is this case for your home then you may be wasting time by getting viewings from normal buyers who wish to purchase with a mortgage. In this instance you may wish to appoint your own surveyor to see beforehand if any mortgage could be raised on your property. If it can’t then a cash sale through a internet house buyer / private buyer or a sale through an auction would be avenues to consider.