Why commission a pre-purchase condition report?
For most people, the purchase of a house or flat, will be one of the most important investment decisions they make. It would appear prudent to instruct a chartered surveyor to inspect the property for defects, prior to purchase. However research indicates that many buyers do not commission such a survey, relying instead on the valuation report produced by the mortgage lender. This mortgage valuation report is based on a very brief inspection of the property (typically lasting less than half an hour) and is mostly for the benefit of the mortgage lender. It is not a condition report and buyers should not rely on it. Instructing a separate condition report will assess the condition of the property and identify any defects. This will allow the buyer to make an informed decision as to whether or not to proceed with the purchase. It can also be used as a basis for negotiating a reduction in the purchase price.
Who should you instruct to carry out the condition report?
Where a mortgage is being used to purchase a property, the mortgage lender will carry out its own mortgage valuation report (as outlined above). This is primarily to confirm that the property is worth the money that they are lending on it. This is not a condition report and is mainly for the benefit of the lender, even though the buyer pays for it.
Most mortgage lenders provide a service whereby they offer to arrange a condition report for an additional fee, this normally being carried out at the same time as the mortgage valuation inspection. This is often referred to as a Scheme 2. The lenders offer a discount on the condition report, on the basis that the same surveyor produces both reports, based on a single visit to the property. However, in many cases, it will work out cheaper for the buyer to arrange their own separate condition report, leaving the lender to arrange the mortgage valuation report only.
Regardless of which surveyor you choose to inspect the property, you must ensure that they are suitably qualified and fully insured. Chartered surveyors who belong to the RICS (Royal Institution of Chartered Surveyors) will be qualified and experienced in this field and hold full Professional Indemnity Insurance. Their conduct will also be regulated by the RICS.