Survey/Valuation fees

The_Surveyor

Has anyone thought about how much of the Survey/Valuation fee charged by the Lender actually goes to the 'Surveyor'.

It is my experience that the applicant customer never questions where the money is being spent - they are told by the Lender or possibly the Broker (this is not an attack on brokers - brokers quote the fee they are given by the Lender) and the customer grudgingly pays the fee.

The fees charged for Surveys (and yes arrangement fees and all the rest of it) by the Lenders never go down! They have gone up steadily over the last 10 years or more. I suspect if you were to draw a curve on a graph it would be very steep.

The residential Surveyor on the other hand has seen the complete opposite.

I'm not asking you all to get out the violin for the poor old Surveyor, but you should be asking yourselves the question "if I am paying significantly more for the services of the Surveyor and the Surveyor is being paid significantly less (and we're talking 50% or more less) what happened to the fee".

Whilst banks and building societies are being asked to be transparent and more accountable - I would argue this is one area they are still not playing fair.

So next time you pay the valuation fee or survey fee to the Lender/Broker - simply ask the question "so how much of this fee is given to the surveyor".

You should also be mindful that if you book a survey through at the same time and the valuation - ask yourself "if the surveyor is only receiving a very small proportion of the fee charge - what level of survey can I expect".

You might wish to consider booking a Survey directly with the Surveyor

It has its advantages:

1/ You get to speak with your Surveyor.
2/ You get to tell the Surveyor of your concerns and expectations.
3/ It will probably be cheaper than through the Bank or Building Society.
4/ There is a good chance that it will be the same Surveyor as it would have been had you gone via the Lender. (Lenders don't have their own surveyors - well very few and not in sufficient numbers).

Outcome - everyone is Happy!!!

You get a quality Survey and the Survey stops having to worry about how he is going to pay his bills. :j

Okay as my debut to this forum - I think have said enough and may never say another word on the subject.

kingstreet

I routinely explain to my clients that of the £250 fee paid to a lender for a mortgage report and valuation, as little as £90 may actually be paid to the surveyor. The rest is swallowed up by the lender in "administration" costs and VAT.

Halifax, for example, charges £280 for a £50k to £100k property valuation, with VAT and £100 admin fee being deducted from that.

I'm not sure I agree with your reasoning on contracting a different surveyor to handle a client's survey though.

Typically, a Halifax mortgage report and valuation costs £280, with an addition of £185 for a Homebuyer's Report on top of that. So a total payment of £465.

If the client contracts a different surveyor to handle the Homebuyer's Report, he'll still pay £280 to Halifax and probably at least £200, probably more, for the extra surveyor to carry out the more detailed inspection.

As I said I wouldn't argue with the point about lenders helping themselves to a large proportion of the "valuation" fee.

Surveying conglomerates like Countrywide and E-Surv might be a subject for another day!!

Gary123456790

The_Surveyor wrote: »

You might wish to consider booking a Survey directly with the Surveyor

Any time I have taken out a mortgage or remortgaged the only options paying the lender to instruct 'their' surveyor.

I once asked about getting a competing valuation from a surveyor employed directly by me, and the lender told me they would not consider this as it is not their surveyor.

Gary.

Wh05apk

Gary123456790 wrote: »

Any time I have taken out a mortgage or remortgaged the only options paying the lender to instruct 'their' surveyor.

I once asked about getting a competing valuation from a surveyor employed directly by me, and the lender told me they would not consider this as it is not their surveyor.

Gary.

The lender will almost always have to instruct the valuation, but you are free to instruct anyone you want if you wish to have an additional homebuyers style survey or full structural.

Voyager2002

Some lenders used to charge an "application fee", with a valuation thrown in for free. That was probably an honest description of the situation.

The_Surveyor

Agreed - it does all depend on the lender. It is my perception that the lenders are doing their best to blur the fee structure between Valuation and Survey. The valuation fee remains relatively high whilst the Survey Fee falls. The client does not see or does not realise the consequence of this - and I don't think anyone takes the time to explain this at the point of sale even if they are canny enough to spot it.

I think there may also be some correlation between Survey fee and arrangement fee, this is likely to be in respect of individual products. It is all to easy for the Lenders to change their pricing between admin fee and survey fee and could be altered at will depending on their target audience - okay maybe I am being too cynical or may be I've become paranoid or both.

Reason - when the lender instructs a Survey with a valuation they no longer pay the Valuation fee to the Surveyor only the Survey fee.

It is in the Lender best interest that the Survey fee is as low as possible and the valuation as high as possible since they get to pocket the whole valuation fee.

It also ensures that Jo Public will be less inclined to call their local surveyor - in this way the Lender is at least as competitive with there survey fee as the local surveyor.

Catch 22 - The lenders don't have the Surveyors to do the work - they knock on the door of the local Surveyor who is offered the work at a significantly reduced fee.

It gets worse the likes of e.surv and countrywide - yes, are firms of Surveyors but they don't have nearly enough surveyors, they are also the Panel Manager for 90% of all the mortgage business - they take 50% of the fee offered by the Lender before passing it on to the local surveyor.

Outcome - a really top quality survey!!! Hmmmm... You pay peanuts etc

We are currently at a time of relatively low volumes of mortgage business and the BIG TWO above are struggling to find adequate number of surveyors. Their own surveyors are dropping like flies - since they are totally overworked.

Many of the large competitors have already gone under - and many Surveyors are so disgusted they threw in the towel a long time ago.

Few graduates will be choosing Surveying or at least Residential Surveying as their first choice of career and this on top of £9000 annual university fees means there will be precious few graduates.

So assuming the residential market improves just marginally in the next couple of years - I wonder who will be left to carry out the surveys.

Should lenders really be allowed to sell Surveys or HomeBuyers etc?

Thrugelmir

The_Surveyor wrote: »

It is in the Lender best interest that the Survey fee is as low as possible and the valuation as high as possible since they get to pocket the whole valuation fee.

The lender is seeking security in the asset. Factoring in other equations such as total exposure in a block or complex and even post code. To meet its board set risk exposure criteria.

Any fees the borrower pays. Should be considered in terms of the choice of mortgage product they choose. Lenders do set fees to discourage mortgage applications.