A bank valuation becomes necessary when you want a loan to buy property.
Once a lender authorizes the valuation, you will need to pay for it over the loan within the agreed period.
What does a Bank Valuation Comprise?
A bank valuation ensures that the amount of cash the lender (often a bank) has given you is secured. It also ensures that buyers pay a fair amount for the property and are not being exploited.
Usually, the bank needs to be sure that they can take back the property, sell it fast on the open market, and recover their cash should you fail to repay.
Often, the party wall surveyor executing the bank valuation may underestimate the value of the property.
Such might happen if the price is not equal to the current market value for similar properties disposed of in recent times, or if the party wall surveyors are unhappy with the agreed-upon sale price. This scenario can be frustrating and may mess the sale.
During an evaluation, the party wall surveyor may notice some flaws in a property that can impact its value like:
- Pest infestation
- Damaged roofing and chimneys
- Cracking on both external and internal walls
Details on the flaws will depend on information about the general condition of the property. The party wall surveyors hardly recommend strategies to fix the flaws.
Property flaws can discourage your lender from signing a party wall agreement to grant you a mortgage.
The action they (lender) take depends on the location of the flaw. Some of these flaws may include:
- Dry rot
- Structural issues
- White rot
A bank valuation is not a comprehensive property flaw report but a simple summary that the bank uses to make informed lending decisions.
The property buyer will neither see the report nor determine what the surveyor noticed during the assessment.
You will need to allocate an independent party wall surveyor to evaluate the property under the party wall act before purchasing the property.
Independent reviews often come in the form of a building survey and the RICS Homebuyer Report.
Understanding the RICS Building Survey and Homebuyer Report
Usually, a property buyer purchases the RICS building survey and homebuyer report to get an overall property view. This report is a visual analysis conducted by a surveyor who provides a comprehensive report highlighting potential issues with your target property.
It comprises a reinstatement price and valuation based on the prevailing market rates. A buyer may purchase a building analysis if they want a detailed property review.
Some of the old properties require comprehensive works to make them habitable. Building evaluations are the most comprehensive RICS surveys there are for residential property.
In this case, a party wall surveyor strives to offer a detailed review of prevailing and possible flaws.
The reports are non-invasive, meaning the party wall surveyors document visual issues without the need to drill holes or lift floorboards.
There are various flaws every surveyor will include in the building analysis report and highlight their severity like:
- Subsidence: Identify signs of internal and external cracking of walls.
- Infestation: The surveyor will check for visible signs of pest droppings and damage on the wiring, floorboards, and skirting boards.
- Damp: Party wall surveyors use a damp meter to determine the property condition and offer their opinion on whether or not the property has been damaged by dampness.
- Asbestos was commonly used as a building material in many properties before it was banned. It can cause dangerous health conditions once inhaled.
A party wall surveyor will establish if any asbestos has been used in the property. They (surveyor) will recommend an asbestos surveyor who can assess and recommend the best risk-free removal method.
A bank valuation lacks the details available in an RICS building survey and Homebuyer report.
Are you considering purchasing property but want to determine its condition in advance?
Hire an independent Party Wall Surveyor who can conduct a comprehensive assessment of the property.
Our surveyors are conversant with the requirements of the Party wall act, including the issuance of a party wall notice.
They are qualified and certified members of well-known governing bodies. Call us on 020 7493 9087, and we shall discuss our options with you.