Home Information Packs - are you for them or against them?

Jorgan_2

A property can be marketed without a full HIP, after 14 days, as long as the HIP provider/EA can show they have tried to obtain all the necessary information.

A property can not be marketed until a full HIP is in place or 14 days has passed (see above).

If a property is Acacia Avenue, a street of 54 semi-detached properties & one detached, a property can marketed prior to the above as 'coming soon a 3 bed semi in Acacia Avenue' as it doesn't identify which property is for sale. You couldn't market a property as 'coming soon, a 3 bed detached in Acacia Avenue' as it identifies which property is being sold, prior to the HIP being produced. Does that make sense?

How diligent Trading Stnadards will be waits to be seen. A Trading Standards Officer can come in my office this afternoon & seize files, computer etc if they had just cause. They don't need a warrant.

A HIP wouldn't be required for the mother passed away scenario as the property isn't being marketed. A HIP would be required if an investment buyer bought a brand new property off plan & then flipped it over on completion.

F_T_Buyer

My comments in red:

Jorgan wrote:

Very long post warning.

I said earlier in this thread that I thought HIPs was flawed, thats a fairly general statement to make so I've stated the reasons why here. It is a long post.

Many people seem to think that HIPs will be the Holy grail, answering all problems associated with the current house buying & selling process. It won’t. Chains will still collapse for all manner of reasons, buyers/sellers can change their minds.

Buyers & sellers will still be able to withdraw from the process without any redress, so its no different to the current system. If a buyer has marketed his property to by a certain property, he will have paid out for a HIP, assuming he is selling a property and if his seller withdraws from the sale, he is out of pocket. No different to the current system.

Yes, but if a seller did pull out, they would have lost the cost of a HIP, also the buyer wouldn't lose anywhere near the the amount they would now. As has been said previously HIPs will reduce those who 'might' sell

80% of homebuyers do not have a survey when buying, the majority of people buying with a mortgage have a mortgage valuation, this is not a survey. Under HIPs 100% of sellers will have to have a survey carried out on their property. Those buyers that already pay for a home buyers or structural survey will probably still have their own survey carried out on their purchase. If they are selling as well, it will be an additional cost that they haven’t had before.

I don't think it's quite as high as 80% - link? But what you will find is 100% of buyers will have to get the legal documents together, which will be in the HIP.

The Government seems to think that buyers will obtain the HIP on their property, have an offer accepted, get their mortgage offer & exchange & complete. The majority of buyers will have to employ a solicitor to read & understand the contents of the HIP. So there is no difference to the current system.

Ok, fair point. But the costs for that solicitor will be far less as he has not go to do any work. Also, if you are requesting the solicitor to interpret the HIP it would be no different to the solicitor interpreting the survey that you would otherwise have got.

Marketing a property, either via an agent or privately, without a HIP could result in a fine of £200. This could be for every day that the property is on the market, depending how diligent your local trading standards office is.

A HIP provider has 14 days to prepare the HIP, if after this time the HIP isn’t complete, but they can show due diligence in trying to obtain the necessary information, a property can be placed on the market, without the risk of a fine. For many leasehold properties, it can take weeks, even months to obtain the all the necessary information from management companies etc, so the seller will pay out for a HIP, the information isn’t forthcoming, the property goes on the market and a sale is agreed. The buyer could still be waiting months for all the information to get to their solicitor. Not really any different to how it is now.

If there is a delay fine, as I buyer I would accept it happens. But I wouldn't start the ball rolling by paying costs until I have the necessary information.

The figures that have been quoted for producing a HIP, usually £600 – 800 are for freehold properties with straight forward titles. Leasehold properties will cost more, because there is more work involved for the HIP provider.

The Government claim it will stop gazumping. HIPs has the potential to increase gazumping as, in theory, all the information a buyer needs will be present in the HIP, so it comes down to who can complete fastest.

Ok, i'll probably annoy some people on here. But I don't object too much to gazumping or gazundering. Ok, it is immoral. But if the seller thinks they could get more for their property, fine. It is a market after all. But what I would object to is losing money because the seller pulls out.

Did you know that as a prospective buyer you will probably have to pay to receive a copy of the HIP? Estate Agents & HIP providers are allowed to make a reasonable charge for providing a HIP to a potential buyer. In paper format the average HIP for a freehold property is about 100 pages, for a leasehold property it could be up to 150 pages thick.

If it was in a paper format, I could see the justification. I would prefer it in a digital format. If EAs thinks they can charge buyers, then i'd like to see it happen. Just like some EAs thought they could charge for giving out property details. Dream on.

HIPs may restrict the number of properties coming onto the market, potentially pushing prices up. Nobody really wants to see a massive jump in house prices, least of all Estate Agents. We’d much rather sell 100 houses a year at an average price of £180k than 50 at £200k.

I have heard that it will push up prices, push down prices etc etc. What we do know if the system works fine in other countries, and has done for a long time. I personally doubt it will cause prices to move much at all. If they are less sellers, there will be less buyers too (as sellers are buyers), so an equilibrium will always be found.

If the market did collapse, I sure HIPs would be blamed. But that would be unjust as the market is already unsustainably high.

Currently if someone isn’t happy with their agent, they can subject to contract, change agents fairly easily. This practice may change under HIPs. Whilst the home owner will probably pay for the HIP, it is the Agent marketing the property that is legally liable for the pack. Therefore if a seller has sourced there own HIP provider, the Agent may not recognise the provider & refuse to market the property with said HIP in place. The seller may therefore have to get another HIP from a provider the Agent recognises. There are something like 140 companies that currently claim to be HIP providers, Agents will not be able to check on the validity of all companies.

Rubish. There will be standards for HIP providers, if an EA rufused to market a property because they didn't user there favoured provider, they would soon lose business.

HIPs will have to be paid for by the seller, any agent offering free HIPs will be covering the cost in their increased fees. Many are talking of 2.5 – 3% on a sole agency. If you don’t want to pay up front for the HIP, many providers are looking at offering deferred payments so that when a property is sold the fee will come from the proceeds. If a property is withdrawn from the market, they will be looking to cover the fee either in a lump sum payment or spread over a number of months. It means you will be effectively signing up to a loan agreement when instructing the HIP provider.

Rubbish. Deferred payment is fine, and probably the best method for sellers. But if the vendor doesn't sell, or wants to use another EA they will have to pay which will be explained to them at the start. It is nothing like a loan agreement - when you go to a restaraunt do you sign up to a loan agreement because you will be paying for your meal at the end, and not upfront? No.

If a property is taken of the market for more than 28 days, a new HIP will be required when it is re-marketed. This does not apply to properties that are off the market because a sale has been proceeding & then falls thru. So anybody who takes a property off the market for the quieter months, say August or December may want to think twice before doing this.

Fine, but if they can't sell they are being unrealistic in the first place. I'm sure the property could still be on the market, but no viewable on the EAs website.

All the above depends on their being enough Home Condition Report Inspectors in place and they can get Indemnity Insurance & licensed. Last I heard there were 400 qualified Inspectors, the governments own figures say we need 7,500. A number of large surveying companies have decided not to train their surveyors to become Home Inspectors.

BobProperty

Jorgan wrote:

A property can be marketed without a full HIP, after 14 days, as long as the HIP provider/EA can show they have tried to obtain all the necessary information.

A property can not be marketed until a full HIP is in place or 14 days has passed (see above).

If a property is Acacia Avenue, a street of 54 semi-detached properties & one detached, a property can marketed prior to the above as 'coming soon a 3 bed semi in Acacia Avenue' as it doesn't identify which property is for sale. You couldn't market a property as 'coming soon, a 3 bed detached in Acacia Avenue' as it identifies which property is being sold, prior to the HIP being produced. Does that make sense?

How diligent Trading Stnadards will be waits to be seen. A Trading Standards Officer can come in my office this afternoon & seize files, computer etc if they had just cause. They don't need a warrant.

A HIP wouldn't be required for the mother passed away scenario as the property isn't being marketed. A HIP would be required if an investment buyer bought a brand new property off plan & then flipped it over on completion.

This is more of a joke than I thought. So no EA anywhere will ever be tempted to backdate a document by a week or two? Don't make me laugh (just think of what Foxtons got caught doing on TV).

How anonymous is this going to be? An "end terrace" in a row of three? A two bed flat with a study in a block of 16 where only 4 have a study? Don't EA's risk someone jumping in with a private offer before the HIP is produced?

Trading Standards have "just cause" to stop you trading on the basis that you might get fined up to £200? There would be a queue of barristers willing to bring a case against the Trading Standards for that, unless they have a "cast-iron" statutory exemption.

That will please "flippers".

BobProperty

From F_T_Buyer's comments:

"But the costs for that solicitor will be far less as he has not go to do any work. Also, if you are requesting the solicitor to interpret the HIP it would be no different to the solicitor interpreting the survey that you would otherwise have got."
Too right I want the solictor to check what's in the HIP. Who would you rely on, someone off a quick training course or a solictor with years of property conveyancing experience? Yes it costs, but I expect that.

"If the market did collapse, I sure HIPs would be blamed. But that would be unjust as the market is already unsustainably high."
Oi that's my prediction - get your own.

"There will be standards for HIP providers, if an EA rufused to market a property because they didn't user there favoured provider, they would soon lose business."
But they will still bill the vendor for it. If the vendor doesn't pay for the first one, are any of the local estate agents going to rush to get their business if they don't pay for the HIP and swap to another agent?

"Deferred payment is fine, and probably the best method for sellers. But if the vendor doesn't sell, or wants to use another EA they will have to pay which will be explained to them at the start. It is nothing like a loan agreement - when you go to a restaraunt do you sign up to a loan agreement because you will be paying for your meal at the end, and not upfront? No."
(Unlike Tass I don't get the chance of eating in £600 a head resaturants ). The point is the system will change, at present if you pull out on an EA, they will have incurred some advertising costs. Once HIPs come in they will have specifically incurred on the clients behalf £400-£1000 worth of costs with no benefit. They will want it back or they will be out of business.

F_T_Buyer

BobProperty wrote:

From F_T_Buyer's comments:

"But the costs for that solicitor will be far less as he has not go to do any work. Also, if you are requesting the solicitor to interpret the HIP it would be no different to the solicitor interpreting the survey that you would otherwise have got."
Too right I want the solictor to check what's in the HIP. Who would you rely on, someone off a quick training course or a solictor with years of property conveyancing experience? Yes it costs, but I expect that.

"If the market did collapse, I sure HIPs would be blamed. But that would be unjust as the market is already unsustainably high."
Oi that's my prediction - get your own.

"There will be standards for HIP providers, if an EA rufused to market a property because they didn't user there favoured provider, they would soon lose business."
But they will still bill the vendor for it. If the vendor doesn't pay for the first one, are any of the local estate agents going to rush to get their business if they don't pay for the HIP and swap to another agent?

"Deferred payment is fine, and probably the best method for sellers. But if the vendor doesn't sell, or wants to use another EA they will have to pay which will be explained to them at the start. It is nothing like a loan agreement - when you go to a restaraunt do you sign up to a loan agreement because you will be paying for your meal at the end, and not upfront? No."
(Unlike Tass I don't get the chance of eating in £600 a head resaturants ). The point is the system will change, at present if you pull out on an EA, they will have incurred some advertising costs. Once HIPs come in they will have specifically incurred on the clients behalf £400-£1000 worth of costs with no benefit. They will want it back or they will be out of business.

Hello there BobProperty,

With HIPs I am for it in in principle, as the poll asks, but I do agree that more can be done, and more clarification is needed.

The main point is about the recent media exposure is SPLINTA (et al) is against HIPs because it will make their business more transparant to buyer like me. Kirsty Allsop just makes herself look stupid by saying we need a system like HIPs (she did this several years ago) then when it comes in object to it. The conservatives IMHO are following the wrong tac, they want to win votes, they want to discredit NuLabour because of HIPs, but Labour are discrediting themseleves anyway so why bother.

With regards to the housing market as a whole, I do think it will crash, the chance of a soft landing has now gone with with the irrational exuberance over the last year. Maybe I should start a thread why I think this... if I had the time...

BobProperty

I would be happy to see a document like a "service history" of a house. Including lease details, deeds, covenants, boiler service records, planning and building regulation approvals, guarantees and receipts for work carried out. When you come to sell it, add a LA search and maybe a survey.
BUT the government shouldn't:

• have someone who's been on a short training course pretend to do survey.
• come up with a set of unworkable and complex rules which will do next to nothing for the process overall but raise a lot of VAT and create 7000 "nothing" jobs.
• "gold plate" EU regulations and hide them in legislation that pretends to improve the house buying process.
• pretend to be improving the house buying process by tweaking statistics to fit in with the rules that they've already decided on.

As someone has already pointed out, if you could get your LA searches in 24-48 hours that would significantly improve the process at no cost to anyone.

Further, an idea that GB would be proud of, to stop chains collapsing - stamp duty to be paid at the point of offer.

There's been a lot of media exposure because the HIP system could be a real turkey and no-one in the media will want to miss the band-wagon if that turns out to be the case. So in the mean time the media will stir things up and make a story out of. Ditto the opposition. If it doesn't work they'll have had to object to it or they will look complicit in it. It's all part of the game of politics. The simple fact that it isn't being universally welcomed and there are doubts about it, will always mean there will be media interest and articles about it.

And "Kirsty Allsop just makes herself look stupid" - yes, she never needed or asked for my help in that department.

Jorgan_2

FTB, I have spoken to numerous leading HIP providers & they are all looking to charge around £25-30 for the HIP in either elecrtronic or paper format.

All the HIP providers that are offering a deferred payment option require the EA to have a consumer credit licence before offering the HIP in this way. It will be like taking a loan out with the HIP provider.

I agree that if a seller withdraws from the sale of a property they will loose the cost of their HIP, but a buyer could have spent more to get to the point of an offer being accepted, than they would under the current system. If they are selling they would need a HIP, cost say £800, if the vendor withdraws 3 days after a sale has been agreed the purchaser is £800 out of pocket. HIPs may prevent those seller that wish to 'test the market' putting their properties on the market, but people withdraw properties for other reasons as well, redundancy, divorce, death are just a few that a seller has no control over.


You say you object to loosing money if a seller pulls out of a deal, so how will HIPs prevent this from happening? If you put your house on the market, post HIP, to buy a certain property and the seller pulls out it costs you money, not just the cost of a HIP but you will have paid out for a solicitor & possibly a survey. So under the new system you stand to loose more if you are selling to buy.

F_T_Buyer

My comments in red:

Jorgan wrote:

FTB, I have spoken to numerous leading HIP providers & they are all looking to charge around £25-30 for the HIP in either elecrtronic or paper format.

Like I say, I think EAs would lose business if this was the case.

All the HIP providers that are offering a deferred payment option require the EA to have a consumer credit licence before offering the HIP in this way. It will be like taking a loan out with the HIP provider.

This would be a credit agreement between the HIP provider and the EA, it does not require the vendor of the property to agree to a credit agreement as you previously suggested.

I agree that if a seller withdraws from the sale of a property they will loose the cost of their HIP, but a buyer could have spent more to get to the point of an offer being accepted, than they would under the current system.

A buyer would not. Only a seller would lose money. Buyers are also sellers, but some sellers will sell independently so they are not in a chain. Also, you are assuming the HIP will be out of date - I beleive the expire date is yet to be confirmed (I have heard different time periods).

If they are selling they would need a HIP, cost say £800, if the vendor withdraws 3 days after a sale has been agreed the purchaser is £800 out of pocket.

Logic? How would the purchaser be out of pocket? Unless you're refering to my above point.

HIPs may prevent those seller that wish to 'test the market' putting their properties on the market, but people withdraw properties for other reasons as well, redundancy, divorce, death are just a few that a seller has no control over.

You say you object to loosing money if a seller pulls out of a deal, so how will HIPs prevent this from happening? If you put your house on the market, post HIP, to buy a certain property and the seller pulls out it costs you money, not just the cost of a HIP but you will have paid out for a solicitor & possibly a survey. So under the new system you stand to loose more if you are selling to buy.

So, you are really assuming all buyers are sellers, so it doesn't matter who loses money as it equals itself out, but this is not the case. I think the root of this is you are aussuming a HIP will expire when in the sales process. Something that needs to be finanalised by the gorvernment.

Also, why do you say buyers will get their own survey (hence lose more money), when you state 80% of buyers don't have a survey?

Jorgan_2

BobProperty wrote:

This is more of a joke than I thought. So no EA anywhere will ever be tempted to backdate a document by a week or two? Don't make me laugh (just think of what Foxtons got caught doing on TV).

How anonymous is this going to be? An "end terrace" in a row of three? A two bed flat with a study in a block of 16 where only 4 have a study? Don't EA's risk someone jumping in with a private offer before the HIP is produced?

A property can not be identified as being on the market without the HIP or 14 day rule being applied. If there are only two end of terraced houses in a street you can not say 'End of terrace in Acacia Avenue coming soon' as that would identify the property due to come on the market.

BobProperty

Jorgan wrote:

A property can not be identified as being on the market without the HIP or 14 day rule being applied. If there are only two end of terraced houses in a street you can not say 'End of terrace in Acacia Avenue coming soon' as that would identify the property due to come on the market.

But it doesn't, it's one of two properties. In the example I gave of the flats it would be one of four. Is that OK? Is "mid terraced" in a row of 5 OK? Just something else that hasn't been thought through by the look of it.