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BobProperty

silvercar wrote:

At the moment the surveyor goes to the EA to collect the keys. The EA lets him know the price of similar properties in the road and his estimate of the valuation. The surveyor walks around the property, checks its still standing etc then values it at more or less what the EA has said.

That's a valuation - I'm talking Homebuyer Report

BobProperty

Ian_W wrote:

...I don't know all the ins & outs but the survey will be by a professional, same as now I expect, and though you pick up on the possibility of corruption I think that's as remote as it is now TBH. The seller sees the the surveyor now, whereas most buyers though they instruct them never meet them, so the opportunity exists for the seller to bribe the surveyor now. Not ever heard of it happening though, have you?...

And wouldn't it police itself? How long would a bent surveyor be able to get indeminity insurance for if s/he was picking up far more claims than others?

There was a case where there was a corrupt solicitor, EA and surveyor. Without going into details it is one of the reasons some mortgage companies only use solictors with multiple partners. It's going to be rare but the system is open to it.

Ian_W wrote:

I also think your point about delays in marketing a prop are only applicable when the scheme first starts - if it takes one, four or eight weeks to get on the market, there will still be properties going on every week after the initial delay. In a weak market taking stock off the shelves, as it were, should provide the fewer buyers with fewer props rather than an over-supply, as now.

The way I see it, the HIP will be a farce. Either you have it in place before you market a property or you put it together while you market the property. Either way there is a delay which is what it was intended to avoid.

Ian_W wrote:

If a property goes to auction it has a legal pack with draft contract, deeds, searches and so. This is not dissimilar but adds in a homebuyers survey. Auction props complete within 28 days and whilst I don't suggest this will acheive the same I think it will reduce the ave 13 weeks downward quite a bit.

But there is usually a 2-3 month lead time on an auction so you can get these things done up front. If you don't you can still sell at auction without say, the LA search being done.

Ian_W wrote:

I think it also evens things up a bit in terms of committment to the process. ATM the buyer pays for everything until completion so it's much less costly for the seller to pull the plug. If the seller has to spend £1K or so up front to be marketed, sure they'll try and get it back in the price, be they won't be going on speculatively. I also think, as certain info may need renewing at cost after x months, prices may be set more realistically rather than risk further expense.

True and it will stop the vendors who just stick the property on with an estate agent at an OTT price hoping that someone desperate will come along and pay it.

Ian_W wrote:

I hope that if it works it leads on to the system working like Scotland where it becomes binding much sooner after offers are accepted. Gazundering/ gazovering, last minute pull-outs are all frustrating and a complete waste of time.

I don't see where it will help with any of those problems, unfortunately.

Ian_W

Bob,
There are 3 things that are inevitable in life - as well as death and taxes, there is change. Most people, I think, believe the system in E & W doesn't generally work well for either vendor or buyer and should be changed. But try to change it and people resist because it's change and there is uncertainty.

Point I'm making is that it will take time for searches, for a survey etc to happen, that is unavoidable but why does it have to take place once the offer is accepted? If those things are in place for all potential buyers to see [disclosure] they don't then need to delay the fraught part, when one side is pinning their hopes on buying and the other on selling with both very much in limbo until completion.

There will be an issue of confidence as to whether buyers will trust the survey commissioned by the seller but if they're professionally done to a set template where all major apects are inspected, hopefully that will be the case. If it is, we may also avoid the issue of renegotiation when the survey finds things wrong with a property. If it isn't trusted, then buyers will still get their own survey done - but how many don't actually have a survey done at all NOW? Relying on the lenders valuation? Quite a high % is my guess.

I think the issue of corruption is spurious, course it's possible. As it is with passports, MOT's, planning permission etc, etc. But if that's the best reason for objecting to my mind it's pretty flimsy.

I'm not going to go through your response picking out bits to respond to, simply haven't got time as I'm decorating my home office this morning - yikes, should be doing it now. I think the point where we may see it differently is that it's supposed to avoid delay. To my mind it's supposed to avoid delay between an offer being accepted and completion taking place not reduce the time it takes to gather all the info needed for a sale to go through.

Finally I didn't say that HIPs will help with gazundering etc, I said if it works, it may open the way to a system more like the Scots one where matters become binding more quickly than now. I see that as 2 stage, if HIPs works and reduces offer to completion to 4-8 weeks instead of 8-12 weeks, given survey and searches are in place, why shouldn't the deal become binding much earlier than completion? But that would need another change!!

BobProperty

I am quite happy with change. I don't like badly thought through processes which will cost me time and money. This whole thing looks like it's been thought up by Civil Servants who don't have much idea how either it works at present or how it will work after their ideas are implemented.
The process as described by ODPM is that you get all this info together up front and put it in a HIP. My point is that holds up the EA marketing the property. If you do it the other way round, the EA starts marketing the property and starts putting together the HIP. So the first people to see the property can't see the HIP as it hasn't been put together yet. (That way round is supposed to be improper anyway). I can only see it helping to speed up the process in parts when the market is moving at a middling speed. When it's hot you'll have buyers offering and being accepted before the HIP is written. When it's cold, the vendor will be shelling out for repeat searches every 3-6 months.
I agree that the survey will at least highlight the problems with a property and stop some properties coming onto the market only to have the faults highlighted at lender/buyer survey stage.
I don't think the corruption thing is spurious. It is rare but this system in my mind makes it easier not harder.
I'll have to look up the details on the intent of the rules. To quote you :
"I think the point where we may see it differently is that it's supposed to avoid delay. To my mind it's supposed to avoid delay between an offer being accepted and completion taking place not reduce the time it takes to gather all the info needed for a sale to go through."
Either benefit has to be balanced against the up front time and money the vendor has to expend to create the HIP. I can see that it may help in the circumstances you highlight, but the timescale for the vendor is the same or longer IMHO.

Now don't reply until you've finished the decorating

Skiduck

Here's a few links which may be helpfull:

The EPC and HIP themselves:

http://www.dsdni.gov.uk/epc_final.pdf

and myths and truths about the HIP's:

http://www.hipassociation.co.uk/news_article.aspx?articleref=32

smallblueplanet

BobProperty wrote:

I am quite happy with change. I don't like badly thought through processes which will cost me time and money..........

........To quote you : "I think the point where we may see it differently is that it's supposed to avoid delay. To my mind it's supposed to avoid delay between an offer being accepted and completion taking place not reduce the time it takes to gather all the info needed for a sale to go through."
Either benefit has to be balanced against the up front time and money the vendor has to expend to create the HIP. I can see that it may help in the circumstances you highlight, but the timescale for the vendor is the same or longer IMHO..........

For me the worst thing about buying and selling houses is the uncertainty that arises between having an offer accepted and exchange of contracts on the property. (IMHO) All the HIP will do is create more paperwork and beaurocracy, it will do very little to deal with the real uncertainty in home-buying.

BobProperty

HELLO - LAST COUPLE OF POSTERS - THEY'VE EFFECTIVELY BEEN DROPPED
http://news.bbc.co.uk/1/hi/business/5191816.stm

Ian_W

Bob,
Working lunch did a series on HIPs from Denmark last week where HIPs, but not Home Inspection Reports, are compulsary.
http://news.bbc.co.uk/1/hi/programmes/working_lunch/5211482.stm
Caught a couple of them and guess what:
Everyone includes an inspection report even though they're not compulsary
AND
Their housing market has neither crashed nor wildly over-inflated itself since they were introduced.
Other points of interest:
EA's have to be registered and pass exams
They, not lawyers do the conveyancing
EA's charge 2%
The buyer has insurance against defects - paid jointly by both parties.

courtjester

Ian,

I also saw the BBC Working Lunch series on HIPs in Denmark - a great report from a great programme.

Note that you can still view the reports via their broadband webpage (for anyone who missed the TV versions) at: https://www.bbc.co.uk/workinglunch

However, although the Denmark situation is encouraging for the future of HIPs in England & Wales, the salient issue regarding the difference between the two property markets is the different law applying.

In Denmark, it is the VENDORS responsibility to provide accurate information about the property and the VENDOR is *liable* to the buyer for any hidden defects up to 20 years from the date of sale.

In the UK, we still work on the ancient 'buyer beware' (caveat emptor) priniciple. So it is the BUYERS responsibility to ensure that the property they buy is free of defects. The vendor must not misrepresent the description of the property, but has NO RESPONSIBILITY to point out defects and NO RESPONSIBILITY for such defects hidden or otherwise if found later (unless there is evidence of misrepresentation of the sale particulars).

The Danes are absolved from their legal liability for defects by providing (at their own cost) a Technical Report (equivalent to our Home Condition Survey Report) coupled with an insurance policy to cover any hidden defects.

For UK HIPs to work in the same way, we would require a change in the law over who is liable for hidden defects after the sale of property.

Because they are liable for the condition of property they sell, Danish vendors have a high motivation to sell properties with their version of the 'HIP'. Virtually 100% of properties are sold in Denmark with a 'voluntary' HIP as a result.

In the UK, there is no such motivation as it is not the vendor's concern once the property is sold.

The watered down HIP is going to mean that properties in the UK will be sold with basic legal searches and the energy report, but it remains to be seen whether surveys will be done at the vendor's expense - that probably depends on the way the market goes, but I suspect that only a small percentage of people will pay for a survey if they don't have to - particularly as this won't be accepted by the buyer or their mortgage lenders who will require their own survey anyway.

Many of the HIP producers will now disappear as they will be unable to support the continuation of their investment without the compulsion elelment required of legislation now abandoned by this government - note that Rightmove have already abandoned their plans to provide HIPs as they had no established legal service to fall back on at a cost of millions.

Watch out for creative conveyancing offers from the remaining major HIP players - special deals offered where properties are offered with the basic HIP information free of charge (no cost to the seller or buyer) with a discount offered to the buyer if they place conveyancing with the sellers pack provider.

This will be used as a sales incentive which will benefit both seller and buyer for properties covered with such free packs.

BobProperty

I've now caught up with the Working Lunch stories and watched the videos. Two things apart from courtjesters comments. The estate agent qualifications have a failure rate of 80-90%, so I can't see their level of expertise arriving in this country overnight, that would take 5-10 years minimum. I have mixed views on the subject. I have always been wary of legislation which says you MUST pass an exam to do some job. I can see that for medicine and law it has it's place, but here we are talking about selling plus some legals plus a survey. The survey is done by a surveyor and I can't imagine that an EA would "go it alone" if a tricky legal question came up, I'm sure they would consult a legal expert. On the other hand, the numbers of "wide boys" and the sharp practices might be cut down on if it meant that they would be stopped from trading as EAs. (They probably wouldn't qualify in the first place, mind you)
Secondly, the documentation has sample mortgage offers in it and the buyer of the "normal" house in the video said all he needed to do was sign. Now, nobody gave any indication of what mortgage products were available in Denmark but I doubt they have 100% 5.5 x income IO mortgages. From a consumer point of view, where does the choice of a mortgage come in, or are all their products similar? Bringing the same system to the UK could be a disaster without cutting the lending to realistic levels. Without doing so, every "houses only go up in value" BTL landlord desperate to get started will be signing contracts and buying anything and everything (after all it's guaranteed isn't it?), which would result in a housing boom and bust when they start to find out it isn't as easy as they thought to be a landlord.