Estate Agents profiting from controversial Hips
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by Kay Mitchell
The controversial Home Information Packs (Hips) have hit the headlines again but this time with a report that indicates that estate agents are receiving commission from providers.
Hips have long been branded “a waste of time” by critics since their inception in August 2007 and can cost anywhere in the region of £400.
They were introduced in August 2007 and many believe they have contributed to the fall in house prices and estate agents have frequently called on the Government to review the packs in an effort to help the struggling housing market.
However, according to an investigation by Channel 4 News, estate agents are operating a scam linked to Hips which is adding as much as £150 to the cost of selling a home.
The end result is that vendors end up paying a higher fee for a Hip.
The Law Society is urging the Government to take action, describing the practice as ‘quite wrong’.
The Royal Institution of Chartered Surveyors is also currently investigating the issue as part of a wider review of commission within the property industry.
Peter Bolton King, the chief executive of the National Association of Estate Agents, has warned that any estate agent receiving commission from a HIP provider, without informing the house seller, is breaking the Association’s rules of conduct and is therefore liable for a fine or expulsion.
Meanwhile, in a statement AHIPP (the body that represents Hip companies) said: “In collecting the agent’s mark-up as part of the retail price of the Hip, the Hip providers is not in the same position as a solicitor who pays a referral fee in return for receiving work.
The fundamental difference here is that the Hip provider acts as an agent for the estate agent in the preparation of the Hip. It is the estate agent who determines the retail price of the Hip.”
Hips were introduced to speed up the home buying and selling process as well as providing consumers with a faster and more cost effective service.
A Hip costs around £350 and contain title deeds, searches, property information questionnaire and an energy performance certificate.
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