With Home Information Pack prices varying wildly, we look at how to make sure you get a great deal.
Home Information Packs have long been the source of debate and controversy in the housing industry.
Much maligned by the Tories who have pledged to scrap them if they win the general election and quietly defended by New Labour who introduced the packs in 2007, following a 1997 election manifesto pledge, the aim of HIPs is a worthy one -- to speed up the homebuying process.
They do this by supposedly providing the buyer with all the information they need about a property (though some of the key elements are unfortunately optional, so they are a bit of a damp squib in practice).
The cost of obtaining the information needed in a HIP, such as searches, is effectively shifted over to the seller, who needs to provide a HIP before they market their home.
But what's in them, how can you get one and what do they cost?
What's in a HIP?
HIPs provide key information needed by buyers and sellers at the start of the homebuying process, aiming to make transactions more efficient and less likely to fall through between offer and exchange.
The following documents must be included in a Home Information Pack:
Index
A list of the documents in the pack
Property Information Questionnaire (PIQ)
A checklist of simple information about a property, including gas and electricity safety, flood risk information, previous structural damage, parking arrangements and a leasehold summary where appropriate.
Energy Performance Certificate (EPC)
Details how energy efficient the property is and how it can be improved.
Sale statement
Basic information about the property
Standard searches
These include local land registry charges, other records held by the local authority and provision of drainage and water services to the property
Evidence of title
Proves the seller owns the property
Other
Additional information for leasehold and commonhold sales, where appropriate.
A property can only be put on the market when all the required HIP documents have been commissioned and paid for (or a commitment to pay has been made)
Some documents in the HIP are optional including:
- Home Condition Report (HCR)
- Legal summary
- Home use/contents forms
- Other documents
- Additional information for leasehold and commonhold sales
Where do you get a HIP from?
As a seller you can either get one from your estate agent (or shop around estate agents), a solicitor or conveyancer, or a specialist HIP provider (which sell directly and through third parties like mortgage brokers). Or you can put the HIP together yourself.
In all cases you have to complete the Property Information Questionnaire yourself.
It is advisable to get a HIP from a company that subscribes to the HIP Code -- a series of checks and measures designed to protect consumers.
Registered HIP providers that subscribe to the code can be found here on the Property Codes Compliance Board website
If you have instructed multiple estate agents you still only need to get HIP, although all the agents need to have access. If you change estate agent you can take your pack with you.
The cost
The seller pays for the pack and there are a wide range of payment options -- plus costs vary enormously.
According to a survey last week by consumer body Which? the cost of a HIP for a three-bedroom semi-detached house ranges from £189 to £413.
For a two-bedroom leasehold flat costs range from £224 to £592. The survey also revealed that estate agents charge the most money for HIPs and that sellers can find cheaper packs by going direct to the HIP providers.
However, it's worth noting that in reality many estate agents work the cost of the HIP into their overall fees. So they might charge an 'inflated' HIP price but lower their standard fees if you take the HIP with them.
It's very difficult to compare HIP prices like-for-like because of the way they are sold. Some solicitors or brokers receive commission or a flat fee for selling a HIP for example, or you can simply buy them direct.
With many estate agents for example you will get a choice. They will allow you to pay upfront for the pack, defer costs until your property has sold, or the price could be simply worked into the estate agent's fee -- so in effect you get the HIP for 'free'.
Many estate agents also offer a 'no sale no fee' option on the HIP but not all do this, so you should ask your agent what will happen if your property doesn't sell. Will you be liable for the HIP charge and how much will it cost?
If your property is off the market for more than 28 days you will need a new HIP in order to remarket it (though you can use the same EPC for three years).
DIY HIP
If you compile the HIP yourself you can pay individual companies for the documents in the pack. Be aware that this may not be any cheaper, and it could take some time and effort to arrange.
You will need to know which documents are compulsory and optional (see list above), complete a PIQ, and arrange for an Energy Performance Certificate to be done by a Domestic Energy Assessor or qualified Home Inspector (you can't do the EPC yourself).
You will also need to go to the Land Registry for evidence of title and a copy of the lease, if leasehold. Plus you will have to get the searches done, either direct from the local authority or personal search company, or through a conveyancer.
Personally, I wouldn't go down the DIY route when you can shop around to trim the cost of the HIP. But if anyone has compiled their own seller's pack it would be interesting to know how long it took and how much it cost.
Whichever route you take as a seller, you have to get the HIP sorted, before the 'For Sale' sign goes up outside your property.
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