Unlike commodities such as canned goods, clothes, and gadgets, houses and properties are sold with very detailed and technical reports. The reason for this is that each house or real property is unique and not mass produced; thus each has an individual value. Formulating reports is necessary in order to determine the price for a house, after considering many factors.
Two of these reports are the real estate appraisal and the surveying report. These are very different reports but they are both inherently valuable and useful for making decisions for important purchases.
Real Estate Appraisal
A real estate appraisal, sometimes called land valuation, is usually a thorough report that determines the market value of a house. This report is created by a professional that considers aspects like sales comparison, cost approach, and factors like location and accessibility. This report states a holistic evaluation of the real estate market in the neighbourhood or city where the house is located as well.
This document is important for buyers because it objectively establishes the price of a property. At the same time, the report serves as proof to lenders that the buyer is borrowing the amount that he or she really needs for the house.
On the other hand, a survey report, which is done by a licensed building surveyor, is an assessment that focuses on the general condition of a house. This is sometimes called a property survey and condition report.
There are many types of surveying reports, and one of them is a homebuyers report. This kind of report does not state the value of a property as compared to the real estate appraisal, but it does contain details that state faults and damage that may affect the proposed value as stated in the real estate appraisal.
A homebuyers report also contains information like estimated renovation or rebuilding costs, urgent problems that can break a deal, and even the results of damp testing of walls, and appliances.
Another type of report is the full building survey, which is more expensive than a homebuyers report. This is very useful for houses that are over 30 years old and have had a history of renovations, because it contains a very detailed structural assessment.
For this, a professional provides a ballpark decrease in value due to prospective defects. The materials used for construction, insulation, drainage, as well as external factors like location are all included in a full building survey report.
These reports go well together because one gives a price range, if not the exact price, of a property at present, while the others explore the possibility of changing the value in the future. Homebuyers usually settle a deal with just a real estate appraisal report, but opting for a survey report further helps in guiding a buyer in making an informed decision.