Posts Tagged ‘Information Pack’

Surveyors get told to do all sorts of things and at all sorts of times but do you know the options available to you? Do you know how to get the best out of a Surveyor? Do you know when it might be best to speak to a Surveyor?

Everybody seems to think differently when it comes to what to expect of a House Surveyor. Here I outline what I think you might need to know for the most common case scenarios.

1. Thinking of Selling? One option is to consider placing a Home Condition Report (HCR) within the Home Information Pack (HIP) on your home. The same Surveyor could also complete the Energy Performance Certificate (EPC). The HCR is something a potential purchaser, and the Mortgage Valuer/Company, can rely upon and sue the Surveyor if it is negligent. You may think a HCR is a good idea if you wanted to prove your home was in good condition OR if it had serious problems and you wanted to define those problems so bidders did not make over-cautious purchase bids to you.
2. If you own a home that is “System Built” (or is registered under the Defective Premises Act 1972) again you may wish to consider the benefit of a Sellers Survey (HCR) to attempt to remove some of the stigma that can attach to such homes.
3. If you are considering buying a home at Auction you have a greater number of survey options. On the one-hand you don’t want to waste too much money and so you might wish to consider simply asking a Surveyor to walk around the home with you to discuss what he is seeing and to verify no major defects exist. Such a “look around” is not a proper survey but provided you can accept that the Surveyor will not produce a written report and cannot accept any liability for such a restricted inspection then you are on track to buy that bargain and have reduced your risks considerably. Alternatively, you could ask a Surveyor to produce a R.I.C.S. Homebuyers Report (that includes a Valuation opinion).
4. Buying any type or size of Home – remember you always have the option to ask a Surveyor to take an informal look around for you (often with you so you can ask questions etc…). This may be termed a pre-survey meeting at the premises. PROinspect have 15 inspections products and so we can cover nearly every customers request for surveys.
5. Buying a fairly simple, modern home – The most popular survey product in the UK is the R.I.C.S. Homebuyer Report (2010 version) – termed the HOMEBUYER REPORT (HBR). This is a product designed by the Royal Institution of Chartered Surveyors (RICS) and is the middle-tier product designed to be brief but factual. It includes a proper site inspection, survey report on condition, market valuation and an estimate of the Rebuild Cost of the building for insurance purposes. The HBR is termed a Level 2 survey product.
6. Buying a larger, expensive or Period home, perhaps in a Conservation Area or one that is Listed – Your options are a Level 2 survey product such as the Homebuyer Report (if the Surveyor thinks this is wise) or a full Building Survey with or without Market Valuation and/or Rebuild Cost assessment. A Building Survey is a top-of-the-range product and I add a word of caution- (1) only experienced surveyors should be completing such products and (2) many products exist that look like Building Surveys but are not. MAKE SURE your Surveyor comes recommended and that you have spoken to the Surveyor – one to one – before you proceed so you can get some idea of his Professionalism and general attitude.

The Golden Rules are –

• Instruct a Surveyor when your solicitor gives the OK after your loan valuation has been completed and your mortgage finance is verified (not simply offered, subject to terms).
• Always speak to the Surveyor who is to inspect your new home: do not be palmed off with only speaking to a secretary, junior assistant or office manager.
• Ask for a survey product recommendation AFTER you have provided full details of the property you are buying (age, price, number of bedrooms, address, etc…).
• Make sure your Surveyor is locally based, knows of the property construction type and is generally experienced both professionally and locally.
• Make sure you will be able to speak directly with your Surveyor after he has delivered your Report.

If your home/property is in southern England I invite you to call me to discuss your exact needs. Stuart Parrett +44 (0)1489 896 174.

What will happen to House Values?

What price professional integrity?

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These are the ramblings of a Chartered Surveyor Housing Expert in south Hampshire, England. They are published as we enter the run in to our General Election 2010.

Let me propose a few facts and then begin to think about how they may interact as we sail through this election and the current recessionary period.

1. The established Planning/PUSH estimate is the need for 80,000 new homes in south Hampshire by 2026.
2. The national and southern divorce rate is high, and increasing.
3. Repossessions remain a current property and social problem.
4. Despite several false dawns, property values are not booming or buoyant.
5. The majority of home buyers still DO NOT take any form of independent home condition or valuation advice.
6. The majority of Estate Agents and Buyers-in-general still pay lip service to Home Information Packs.
7. SAVA/Hometrack are introducing “Probable Value Range” opinions within Home Condition Surveys that can be generated by the newly created Home Inspectors for Home Information Pack purposes.
8. To stimulate savings the Bank of England must increase rates of interest, perhaps sooner than many wish or expect.
9. National and local housing starts are falling as we speak and I expect that rate of building to fall even further as disposable incomes fail to rise in the next couple of years.
10. Lenders continue to offer loans on terms unacceptable to most first time buyers (and others) – who has a 20% to 25% deposit nowadays?

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I have always found that as a cyclical market trough finds its way to us, for even a fully blown recession, the Economists and Housing Experts all say they did not see it coming but expect readers to believe them when they begin to predict what is to come. Well, I say NONSENSE.

Media hypes up published market data and paints a headline along the lines of “House Prices UP for the fourth month in a row” etc…. What they do not appreciate are underlying trends, imperfect consumer knowledge and uneducated actions plus the degree of conflict of interests within the loans/legal/valuation/survey markets. There is even great uncertainty within the Royal Institution of Chartered Surveyors (RICS) who, along with the Council of Mortgage Lenders (CML) are issuing revised protocols and Practice Statements on how to value New Homes.

• Loan Valuers have been told that they must factor out of the deal any sales incentives: this means that most valuations are now falling short of the stated asking prices.
• Loan Valuers are being told that the security of a New Home is its second hand value and that therefore they should ignore any potential “new build premium”. Again this kills any chance of a Valuation being near to the agreed price.
• Loan Valuers often break professional standards and protocol but not inspecting homes to the required standard when a survey has NOT been requested: a cursory viewing but mandatory damp test plus “head and shoulders” loft inspections are ignored. I have personally been told this by many sellers when I have visited for buyer, private survey purposes.

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Moving on – A Chiswick home owner recently contacted me saying that several Estate Agents had stated her home was worth £875,000 over a year ago and that after full refurbishment she would get about £900,000 (in a falling market). She recently got her Mortgage Company to Value her home, the same gentleman who valued it at £875,000 last year, and the valuation was set at £650,000 (over 30% lower than last year). Now, it is possible local values have fallen by this margin but a cursory glance at general values in the district seems to not support such a proposition. Indeed, it seems the Valuer has simply been told to be cautious. This case has the hallmarks of professional negligence and/or conflicts of interest written all over it. This goes a long way to further harm the marketplace and to put back any fragile recovery that may exist “out there”.

Conversely, looking at the market from the stance of a buyer – why don’t buyers take truly independent advice?

The HIP can and and should be a valuable resource for information that can and will help buyers if they choose to look – it is my experience they do not even ask to look at HIPs.

To a Surveyor and independent Valuer the HIP is one of the first things I refer to – position of water and drainage lines – warranty and guarantee documents – planning history with dates – legal issues – a plan to see if boundary disputes may be current – the list goes on………

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Moving on further – South Hampshire is scheduled for a 7% increase in population up to 2026 but it is scheduled to have an 18% increase in housing. Certain areas will have a disproportionate burden to swallow on their doorsteps in that new housing can be expected to lower values in the post-recession marketplace by increasing housing supply. Conversely a high divorce rate will increase the demand for, say, two bedroom homes (and perhaps Flats). These factors, plus any interest rate rises, may create a very complex market in the post-recession marketplace and it is at this time that the near defunct Home Inspectors (trained to complete low grade home surveys to go into HIPs – a product that was removed from the HIP on political grounds) are being encouraged to produce reports that attempt to predict what a home “might be worth” by looking at historic statistics.

I find this very strange indeed. At a time when the function and services of an expert professional Valuer are, or shortly will be, at an all time high, the powers that be are allowing a novice form of Valuer to float onto the market a predictive value report product.

Words fail me….suffice to say that buyers are encouraged to break with established methods, staid thinking, and to commission the services of their local Chartered Surveyor Valuer – somebody who knows the local markets and can be sued if they get it wrong. Why would anyone wish to gambol in the current market conditions? Not taking basic precautionary professional advice will adversely affect your wealth. If you have learnt nothing from this recession – learn this, nobody will help you, you have to help yourself and this starts with your choice of adviser – go independent every time.

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My advice to L.R. in Chiswick? Start proceedings for Valuer negligence.

My advice to the political parties during this election? As I have seen nothing in any political manifesto to change any of what I have discussed above, I suggest you all return to HQ and rethink four subjects – (1) the meaning and definition of connected person within any property transaction, (2) how to get tough with errant Estate Agents on HIPs, (3) the need for housing projects to remains on schedule to create jobs, to create affordable housing in all UK districts and (4) to re-introduce Condition Reports within HIPs, as has been successfully introduced in Scotland (but with a change – to be completed by both Home Inspectors on modern units but experienced Chartered Surveyors if the home is over, say 30 years old).

When it comes to selling your home privately you stand to gain a lot of money by way of saved costs. But, just how easy is it?

A sell (selling by “private treaty”) is, on the one hand, perfectly feasible if:-

1. you simply sell to a relative or to your neighbour without any advertising or marketing. Your have not “marketed your home” and the Law and how House selling regulations are interpreted says this is a private transaction. It could easily be considered a “marketed sale” if you depart from strict guidelines – do you know all the in’s and out’s of such Regulations?
   
2. If it is a genuine private sell without marketing then you would not need a Home Information Pack (the HIP with Energy Performance Certificate – the EPC).
3. and you avoid all the hassle of advertising and have people trample through your private space – your home – your pride and joy.
4. You also avoid Estate Agents with sharp suits and smooth tongues. What price for this?
   

On the other hand:-

1. Are you sure you are not under-selling your home?
2. Have you considered the possible benefit to value if you first did certain repairs? Are you sure you know who to ask for this advice? Spend £500 on XXXX and you might ask for twice as much as added to the house value!
3. Do you know how to vet your buyers to ensure they are serious and aren’t going to cause problems “later”.
4. Are you sure you have infringed the law and property regulations and may get a Penalty Notice served on you at any moment?

Balancing these competing forces will tell you which way to go but do think seriously about it.

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Selling your house privately? What are you saving?

Save 1.5% commission = £1,500 plus vat (per £100,000 of house value)

Save your HIP cost = £400 with partial vat

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The only problem you have is the unknown…….

If you are truly knowledgeable then you are saving real money and the consequences, if all goes wrong, will be minor.

If you are not fully knowledgeable and may need help if the going gets tough then you may just regret attempting to penny-pinch.

Perhaps getting the Estate Agents in to give “initial free advice” (without telling you may go private) is not such a bad thing?

Perhaps getting PROinspect in to talk about value and disrepairs, and the effect of doing repairs – effect on value – also isn’t so silly?

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A third Way?

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Nowadays nothing is new. Starting to string up are PROPERTY BROKERS: often these are internet based, but not always.

Website services exists for simply listing your home are available for sales – this means you will need the good old HIP but the fee for this limited brokerage service will be much smaller than a full Estate Agents commission.

Certain Brokers mix internet service with limited marketing and other actions. Again these will save you a large sum.

The secret here is to correctly match what your home needs to dispose of it to those services that are available to you. Why not invite a fee quotation from a (1) traditional Estate Agent, a (2) “partial” Agent/Broker and (3) a full internet Broker service whereby no visits to your home are made at all (sometimes with the exception of a professional Photographer)? You could then assess the value that each brings to the table and match that with what you believe your home needs to get it sold.

For example – if your home is modern and on a large estate (is similar to most other homes and many have sold recently or are on the market) then provided it is in reasonable order then you may not need the full services offered by a traditional Estate Agent.

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A final two thoughts – (1) what about home swaps? Google house-swaps and see. PROinspect would immediately mention that if you go down this route then a private survey would be essential for self-protection purposes: (2) what about selling quickly to an Investor? Various organisations will buy your home “upon request” where an offer can be provided without a full viewing: the latter may be required as you are seeking to avoid an imminent repossession or you simply need the equity in your home quickly – no fees but perhaps you will not get full market value (in some cases nothing even ner to full value). Google sites like National Home Buyers to see how such schemes may work for you.

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A Footnote — I have recently been involved with Estate Agents in the disposal of my Parents home closeby. A long chain developed but we priced the house to sell and found a home to buy quickly. When chain problems cut in, and they often do, our own Agent acted with great authority and rapidity and circumvented several problems before they got out of hand. I have been very impressed with the professionalism shown (and suspect some Agents would not have been so helpful). We have not yet exchanged but are confident we will.

I must state that my Parents just could not cope with self-selling their own home and needed full Agency services: even though I could sell my own home I would normally request full Agency services because I am a busy person and just could not find the time to do all that a modern Agent has to. This is not a choice but a necessity.