Watch for home buying's nasty financial jolts

When you are on the cusp of a house purchase, there are times when the whole process seems too arduous to be worthwhile.

There is the endless form-filling, the gathering together of all the evidence that proves your financial honesty and then the actual business of moving all your worldly goods from A to B.

In addition, there are the nasty little jolts that appear along the way. One of the first such surprises is the survey - a subject that appears dull but can become very interesting depending on the information it throws up.

Mr Tice O'Sullivan of PrimaFinance says most of the clients availing of his mortgage brokerage services begin with little or no knowledge of surveys, or how necessary it is to get one. He says this is particularly true for young first-time buyers. Mr O'Sullivan's says the structural survey is a must, no matter if the property is new or second-hand.

One key advantage in employing a surveyor to check out your prospective property is that they will be able to draw up a list of "snags" that require attention before contracts are signed.

For an older house, the survey will also show up potential problems, such as damp - factors that could allow a buyer to negotiate a lower price, or persuade them to back out altogether. "Obviously second-hand houses can be any age so we strongly recommend that the buyer does it before paying a nonrefundable deposit at the contract signing," says Mr O'Sullivan.

The surveyor will usually supply information on the property in a report which he or she will go through all aspects of the structure and offer an opinion on how sound they might be.

This follows an on-site visit from the surveyor, who should be able to organise an appointment and draw up the report at short notice. Mortgage brokers will usually be able to recommend a surveyor while, as with all professional services, word of mouth will help in making a final choice.

Given that structural surveys can cost anything between €200 and €650 (depending on the surveyor and the size of the property), it is not surprising that buyers on tight budgets may view the service as an unnecessary expense. This situation is further reinforced by a lack of insistence from lenders that a survey be completed.

Mr O'Sullivan notes, however, that mortgage providers differ in their approach to surveys, with some highlighting it in loan offer documents and others ignoring the issue altogether.

AIB says in its loan offer, for example, that it "may" require a survey to be funded by the borrower, while Ulster Bank recommends that one is taken out. IIB also reserves the right to request a survey paid for by the borrower, but the reference is buried in the small print, as it is with Bank of Ireland. Permanent TSB does not mention surveys at all.

"In summary, most clients are not aware of the importance of getting one," Mr O'Sullivan says.

Another service of which new buyers tend also to be blissfully unaware is the valuation - another little drain on their finances.

The valuation - which allows the institution to make sure that the property is worth what the buyer is paying for it - will be carried out after a lender has approved the loan and is preparing to release the cash.

It usually costs in the region of €130 plus vat and will be charged to the buyer unless they can negotiate otherwise by themselves or through their mortgage broker.

Mr O'Sullivan says all lenders require a valuation but points out that some are prepared to absorb the cost themselves rather than adding it on to the borrower's mounting bills. First Active, for example, offers to pay for the valuation as part of its first-time buyer's package and Ulster Bank will reimburse the cost to holders of its U-First current accounts.

Crucially, most lenders will agree to reimburse the cost of the valuation if they decide not to offer the loan after all.