Home Report
Since 2008, Homes for sale have to be marketed with a Home Report, which contains 4 elements that provide buyers and sellers with better information about the condition and value of homes before an offer to purchase is made. One of the reasons it was introduced was to avoid a situation where multiple surveys were being carried out by surveyors on the same property prior to offers being submitted by solicitors. Hence the alternate name of the Single Survey.
The Single Survey contains an assessment by a surveyor of the condition of the home, a valuation, and an accessibility audit for people with particular needs.
The Energy Report contains an assessment by a surveyor of the energy efficiency rating of the home and its environmental impact. It will help buyers to make new green choices by comparing energy costs across different homes. It may also give practical advice on how to reduce carbon emissions and save on energy bills.
The Property Questionnaire is completed by the seller of the home. It contains details regarding the home, such as Council Tax banding, Utility Providers, Phone and Broadband suppliers and factoring costs and arrangements that will be useful to buyers.
As the Questionnaire gives prospective buyers a useful summary of information such as alterations made to the home it can also alert conveyancers to potential issues at an early stage and may lead to necessary documentation such as building warrants being obtained earlier in the conveyancing process.
Q. How long does a home report last?
A. I have heard a lot of misinformation of this subject.
- The Home Report will last for as long as the home is on sale, providing there is no break of marketing.
- It does not need refreshed every 3 months. However, when an offer to purchase has been agreed, the bank may ask for the surveyor to revisit the property if it is more than three months since the original survey. This is not always the case; many banks will send out a different surveyor for a valuation. The cost of the refresh is not a full replacement Home Report but a refresh and is around £120-£150.
- A Home Report is purchased by the homeowner and can still be used should they choose to change estate agents without having to have it refreshed.
Q. What is the valuation on the Home Report, and can it be relied upon?
A. The valuation is the surveyor’s opinion as to what the property is worth in the current market at the time of the survey. Before the surveyor puts his valuation on the HR has does some research and finds properties of a comparable type that have sold within a certain time frame. He will adjust the valuation by condition and extensions, improvements, more modern installations etc.
The valuation is of course an opinion from a property expert with RICS qualifications and he will normally have evidence with which to back up the valuation. In a quickly changing market the valuation may be out of date very soon.
Q. What If I think the value is too low?
A. As a buyer then you have a bargain! Other buyers may notice too so be prepared.
As a seller you may have a discussion with the surveyor and your agent can assist here too. The surveyor has to back up his decision with comparable evidence, so if you have some you to back up your case he may be persuaded. You do not have to authorise the Home Report until you are satisfied with the contents.
Q. What if you think the value is too high?
A. As a buyer you can offer below the valuation, although the vendor may reject it depending on the circumstances. The length of time since the report was done may be an influence on this decision. Also, if the report indicates that a lot of work is required, the cost of doing the work can vary from buyer to buyer.
A seller’s motivation might not be to achieve the maximum price but to sell within a time frame. The important thing is the valuation should be realistic.
Q. If I am a buyer, what should I offer with regard to the Home Report valuation?
A. You should offer what you are prepared to pay. Even if the HR has a lot of issues reported, if it is only recently produced then those issues would have been taken into account and the valuation should reflect them (i.e. lower than a similar property with fewer issues). If the HR is older, then the valuation may have reflected the amount of work required but with the market changing it is now not as realistic. The owner’s expectation may have changed since the home was first surveyed.
Q. What do the numbers 1 to 3 mean in the single survey?
A. The way I like to explain these to my sellers is that the surveyor gives each area of the property marks out of three.
- Means there are no current issues, no reason for concern.
- Means there is a slight issue; the issue may need to be resolved in the future but is not urgent.
- Means that the issue is immediate and that quotes for replacing or repairing should be sought before making an offer.
Some issues are bigger than others, e.g., a home which had glass panel doors but did not have safety glass would get a “2” but the issue may be of no concern to 99% of buyers. Similarly, an older style fuse box will also get a “2” as the electrical system has not been checked by an electrician which happens when a modern, current standards, consumer unit is fitted. This may be a worry to some but does mean that the home needs rewired.
Therefore, a perfect home report is one where everything is rated as “1”.
Q. Can my house achieve more than the Home Report Valuation when I sell?
A. Yes. This is more likely when the market is hot and competition for property in the area is high. When there is a shortage of properties on the market or a home for sale is very popular because of its location or specs buyers realise they must offer a higher price to obtain the property. As the Surveyor likes to see comparable homes having sold when making the valuation it might be that the market is rising due to demand quicker than the information is becoming available to him.
It should be remembered though, that a buyer can offer more than the valuation on the Home Report, but their mortgage company may only lend up to 90- 95% of the survey valuation. The buyer has to fund the deposit plus the amount offered over the Home Report. It may be that the agent would require proof of funds before advising the seller to accept the offer.
When the Surveyor has completed his survey, which takes around an hour or more depending on the size of the property, he will forward it to his office to be typed up and a draft prepared.
The draft will be sent to vendor to approve as soon as it is ready. It is important to read this carefully as once the full report is published, it cannot be altered. If they have any questions, they should be delt with at this point while still on draft.
Once the draft approved, all they need is to receive the completed questionnaire from the seller and they can publish the final report which is the one seen by potential buyers.
THINKING OF SELLING?
Why not have a look at our Top Tips page to find out how to prepare for the Home Report Survey.
Preparing Your Home for Viewers
Preparing Your Home for Photographs
If you would like to find out more about the processes involved in selling your home, please contact Hoppers Estate Agents and find out about obtaining your homes MOT prior to going to market and find out if your house is “BEACH BOD READY” for the market.