Scottish Home Reports

[drhouse]

Hello,
Does anyone up in Scotland have any feedback about the new Home Reports. I have had a few valuations for 'speculative sellers' - i.e. seen a house they want to buy and want to try and sell - but the cost of the report has made them think twice given the current market conditions.

There are definitely a lot less properties coming on here. I think that is initially the gloomy economy but are Home Reports also having an effect ?

Also the prices are all over the place. Perhaps estate agents south of the border could let me know how hips have worked out there with costs.

[brian]

Why would a seller baulk at spending a few hundred on a report that could reassure buyers, when we're in a buyers market?

If I were selling and serious about it, I would be trying to do everything I could to raise interest and engage buyers - as opposed to worried about basic and necessary costs in doing so.

[drhouse]

Originally Posted by brian

Why would a seller baulk at spending a few hundred on a report that could reassure buyers, when we're in a buyers market?

If I were selling and serious about it, I would be trying to do everything I could to raise interest and engage buyers - as opposed to worried about basic and necessary costs in doing so.

I had one seller 'thinking' about a move abroad but the additional cost put them off trying to sell right now, especially as the house had been on the market for some time when they bought it and the current market does not bode well for a quick sale, whether it has a report or not. There was also the issue that a shelf life of 12 weeks meant that they may have to pay for a refreshed report - more cost.

Another seller was interested in buying a cottage which was one of a kind. Last year they would have gone ahead with marketing to try and sell and get the cottage. This year there was a possibility they might not sell in time and would then have an extra £400-£500 to pay for nothing as there was no other property they wanted.

A 'few hundred pounds' may not seem a lot but it is if you haven't got it and/or are on the verge of repossession. An acquaintance of mine has had her property on the market prior to 1st Dec so doesn't have a report. She has been made redundant and barely has enough to cover day to day living. She can't afford to put her heating on never mind pay for a home report and even with deferred credit it still has to be paid at some point.

Do you really think a report will engage buyers ? I would not disagree on an older property but on a modern development I think the price will be more important.

[brian]

I think if sellers have difficulty selling then they absolutely need to look to sweeten the deal to underline their seriousness to sell.

You see various sweeteners all of the time on property sales websites - fixed price, reduced price, stamp duty paid, free survey, etc.

The expectation would be that any buyers on the market would give these a second look.

The simplest way to sell fast would be to simply reduce the price significantly - but this is a bigger loss overall. It just seems to make more financial sense to try cheaper marketing plus points, such as a report, before more drastic measures such as dropping £10,000+ from the asking price.

However, if your friend is already in such dire financial circumstances, then to speed up the sales process they will probably need to look to cut the asking price significantly if alternatives such as home reports will be too immediately costly.

Hope that helps.

[drhouse]

Originally Posted by brian

I think if sellers have difficulty selling then they absolutely need to look to sweeten the deal to underline their seriousness to sell.

You see various sweeteners all of the time on property sales websites - fixed price, reduced price, stamp duty paid, free survey, etc.

The expectation would be that any buyers on the market would give these a second look.

The simplest way to sell fast would be to simply reduce the price significantly - but this is a bigger loss overall. It just seems to make more financial sense to try cheaper marketing plus points, such as a report, before more drastic measures such as dropping £10,000+ from the asking price.

However, if your friend is already in such dire financial circumstances, then to speed up the sales process they will probably need to look to cut the asking price significantly if alternatives such as home reports will be too immediately costly.

Hope that helps.

I do see where you are coming from and I have used the incentives on other properties to varying degrees of success. My friend has reduced her price in line with the market but it has not worked so far. However, if there was an interest on one of my properties on before December and the buyer wanted a report I would encourage any of my sellers to commission one.

The Home Report basically sets the price with a valuation report. Currently that may be a lot less than people are expecting and that is a sad fact of life, however it may leave them less scope to offer incentives.

[googler]

Can you point to an official source that states a shelf life of 12 weeks?

[drhouse]

Originally Posted by googler

Can you point to an official source that states a shelf life of 12 weeks?

No. All the courses from the Government and the NAEA have said it is "unlikely" that lenders will accept a valuation over 12 weeks old. I know that some solicitors are adding clauses to agreements stating that Law Society guidelines recommend that a Home Report should not be relied upon if more than 12 weeks old and it may be necessary to obtain a refreshed report. The only definite guide is that the report cannot be more than 12 weeks old when the property comes on the market.

The problem is there are no definitive guidelines and the government policy seems to be that the market will decide which, to me, means they don't know what to do.

[googler]

So.... owner gets report, someone comes along to see the house in the 13th week, and puts offer in. Buying solicitor then asks for another report? What then?

Owner says "Yes" and pays another £500 or so; deal goes ahead. Or;

Owner says, "No, make do with the original report". Does the buyer then walk away? Does their solicitor advise them to walk away cos the report is one week out of date? If I were the buyer, and they advised me to do that, I'd be asking "Why? What changed between week 12 & 13?"

If I were the seller in this situation, I'd be telling the week 13 buyer "Nothing's physically changed since the report was done. If you want an opinion on whether the value's changed, you can get your own surveyor to come along for a valuation, but I'm not paying for it"

2penny's worth

[drhouse]

Originally Posted by googler

So.... owner gets report, someone comes along to see the house in the 13th week, and puts offer in. Buying solicitor then asks for another report? What then?

Owner says "Yes" and pays another £500 or so; deal goes ahead. Or;

Owner says, "No, make do with the original report". Does the buyer then walk away? Does their solicitor advise them to walk away cos the report is one week out of date? If I were the buyer, and they advised me to do that, I'd be asking "Why? What changed between week 12 & 13?"

If I were the seller in this situation, I'd be telling the week 13 buyer "Nothing's physically changed since the report was done. If you want an opinion on whether the value's changed, you can get your own surveyor to come along for a valuation, but I'm not paying for it"

2penny's worth

After the end of 12 weeks the buying solicitor will recommend asking for a 'refreshed valuation' and that will be up to the purchaser but the lender MAY insist on it.

The seller can refuse to pay for a refresh (I have been told that it will be around £100 for a refreshed valuation but surveyors are either not sure or willing to commit themselves yet). If the seller refuses it is up to the buyer to pay for one if he needs it or walk away. I know that some solicitors and IFAs are still going to recommend that buyers get their own survey anyway instead of relying on the report. This seems to me to defeat the whole point of the report which was to make buying easier.

It comes down to how much a) the buyer wants it and/or b) how much the seller wants to sell.