"Find a surveyor who you know, trust and like to work with and build a closer relationship with them. "
He chats to Joe Arnold, managing director of Arnold & Baldwin about some of the misconceptions around surveys and valuations.
MD: I’ve been frustrated by valuations in the past, but a Homebuyer Report on a property I was purchasing identified some issues with the property and helped me to negotiate to ensure they were rectified. It probably saved me thousands of pounds – so do you get frustrated with the reputation that surveyors have in some corners of the industry as standing in the way of deals proceeding?
JA: I do get frustrated. I understand that brokers can find it very irritating when a property is not valued as they would expect, but there is no such thing as a down valuation. A surveyor provides the only formal valuation of the property. If this valuation is lower than the amount a buyer has agreed to pay, then it just shines a light on the property being over-inflated in the first place.
My message to brokers is find a surveyor who you know, trust and like to work with and build a closer relationship with them. If you work more closely with a surveyor you could find they actually help to increase your conversions rather than preventing cases from proceeding.
We are really open to this at Arnold & Baldwin. I might receive a call from a broker who is considering an application to a particular lender on a property in a high-rise block to ask whether it’s the sort of property they would be happy lending on. Or, brokers can contact us if they have received a valuation from another surveyor they think is incorrect. We will carry out a desktop valuation and if we think it is unjust, we can provide some comparables that a broker can use to contest the valuation. If a surveyor is presented with three robust comparables that they did not have sight of initially, they are allowed to change their opinion and valuation.
MD: Should all buyers be made to take a Homebuyer Report?
JA: It obviously depends on the age and type of the property and the risk appetite of the buyer, but I would say, as you have found, that a small investment during the buying process could save a lot of money in the longer term.
I also think there is some misunderstanding amongst buyers that conveyancers will pick up on any problems with a property. However, The Conveyancing Association provides guidance to its members that they should not raise any questions about any defects with a property unless they are specifically referenced in the survey.
MD: How is it possible for a property to be valued so differently by different surveyors?
JA: This is usually the result of different types of valuation instructions and the ability to accurately assess the condition of a property. For example, two properties may look exactly the same from the outside on a drive-by valuation, but an internal inspection could reveal that a property has a huge crack in the back wall and requires significant investment to put this right.
Or conversely, an AVM may not account for the extra value commanded by a particularly unique or desirable property. I have a recent example where a sale was agreed on a unique period property in Epsom for £750,000. The lender carried out an AVM which valued the property at £700,000. As a result of this AVM the buyer got cold feet and pulled out of the deal, then two days later the property was sold to a cash buyer for £765,000. A computer tried to work out the value and got it wrong as it couldn’t factor in the unique charm and character. It goes to show the value of a physical inspection.
