The Homebuyer's report: what is it, how much does it cost and why do you need one?

Make sure your future home has no major faults and is worth the asking price by carrying out a homebuyer‘s survey - find out more here.

A Homebuyer's survey will identify
any major faults in the property

According to the Royal Institute of Chartered Surveyors (RICS), only around 20% of homebuyers decide to have a professional property survey completed before buying a new home. However, taking the time to carry out a report could save you money, time and heartache in the future by identifying any faults in the property. As architect George Clarke remarked at this year‘s Ideal Home Show: “You home is probably going to be the biggest investment you make in your life – so it has to be right.”

Many organisations, including the Council of Mortgage Lenders and Which?, recommend carrying out a homebuyer or building survey in addition to a mortgage valuation. A homebuyer's report is less complicated and time consuming than you might think, as Mike Crosscurth MRICS, from James Slater & Company in Gloucestershire says: “Depending on the size of the house, the survey could take only around an hour and a half and comes in a standard format report issued by RICS.”

What is a homebuyer's survey?

RICS designed the survey, which is also known as a homebuyer's report or valuation. Mike carries out both building surveys and homebuyer surveys, he explains that: “The homebuyer survey is briefer than a building survey and cheaper.”

The homebuyer‘s report is more detailed than a mortgage valuation, which simply checks the building is worth the amount you are asking to borrow for it. “Homebuyer's surveys are appropriate for modern homes that are in a generally good state,” says Mike. If the property is old or dilapidated, it will need a proper building survey instead which will check everything more thoroughly.

“What you are looking for throughout the survey depends on the property,” Mike says. “If you arrive at a 1960s four bed semi, then you know how it should have been built and are looking at what state it is in now.”

The homebuyer's report contains:

A surveyor will give their opinion
of how much the house is worth

• An inspection of the major indoor features like ceilings, the roof, walls, floors, bathrooms and woodwork.
• An inspection of permanent outdoor buildings and the outside of the home including roofing, pipes and gutters, the walls, windows and outside doors.
• The report rates the main areas in terms of condition; a rating of three means the area is in need of urgent repair, rating one means no action is needed.
• An inspection of the visible parts of the heating and drainage systems as well as the electric, gas/oil and water services.
• The report will identify areas that you will need to consult a legal advisor to investigate further.
• A valuation of the property.

Why should you get a homebuyer's report?

To identify any problems with the property – “If a serious problem is uncovered during the survey you know not to buy the property until carrying out further investigation,” Mike points out. As problems are rated in terms seriousness on the report, this will provide you with a good idea of how much work needs to be done on the property and which issues are most urgent.

For insurance purposes – the surveyors valuation will give an opinion of the market value of the property and reinstatement cost, which your insurance company will need to know.

To help you decide whether to purchase the property – the value estimate and knowledge of any work needed will help you decide whether to buy the property. The report may also give you scope to negotiate the price with the seller (especially in light of any defects that may have been discovered).

Cost of a homebuyer's survey

“The price of a homebuyer's survey will depend on what the house is like and where it is. Use a local surveyor who will have knowledge of your area,” Mike advises. According to RICS, the price of a homebuyer's report starts at around £250 and varies depending on the size and value of the property. A house worth between £100,000 and £249,000 will cost around £350 to survey whereas a home worth less than £99,000 will cost £300.

AB