Property Valuation and Surveys Flashcards

What is 'gazumping' in the UK property buying process?

Answer: A seller accepting a higher offer from another buyer after already agreeing a sale

Gazumping occurs when a seller accepts a higher offer from a new buyer after having already accepted an offer from another buyer.

In which circumstance would a lender most likely instruct a 'retention' following a mortgage valuation?

Answer: When the surveyor identifies repair work that must be completed before full funds are released

A retention is applied when a surveyor identifies necessary repairs, with a portion of the loan withheld until the work is verified complete.

What is the difference between 'market value' and 'mortgage lending value'?

Answer: Market value reflects current sale price; mortgage lending value is a more conservative long-term sustainable value

Mortgage lending value is a more cautious, long-term sustainable figure, while market value reflects what a buyer would pay today.

What is 'negative equity' in a mortgage context?

Answer: When the outstanding mortgage balance exceeds the current market value of the property

Negative equity occurs when the outstanding mortgage is greater than the property's current market value, leaving no equity for the borrower.

Which of the following property types is typically considered 'non-standard construction' by mortgage lenders?

Answer: Concrete prefabricated property built post-WWII

Post-war prefabricated concrete properties are classified as non-standard construction and can be harder to mortgage due to structural concerns.

What does a HomeBuyer Report (Level 2 survey) include that a basic mortgage valuation does not?

Answer: A summary of condition ratings, visible defects, and recommendations for repairs

A HomeBuyer Report provides condition ratings for key elements and highlights visible defects, going beyond the lender's basic valuation.