what do sellers packs mean for you?
Home information packs (HIPS) will become law on 1st June 2007 and will change the way that houses are sold.
Currently properties are marketed from day one, and once an offer has been accepted, the solicitors from both sides will gather all of the legal paperwork to complete the transaction.
Many problems can occur at this stage, for example structural deficiencies, defective title deeds etc, which can all serve to slow the process down and increase the chances of the transaction not completing. In fact, industry-wide, 38% of all accepted offers currently do not go through to completion for one reason or another.
In an attempt to speed up the house buying process the government has introduced Home Information Packs, sometimes referred to as Sellers Packs. Exactly what will be in the Home information pack is yet to be formally decided.
Home Information Packs may contain:
- Terms of sale
- Evidence of title;
- Replies to standard preliminary enquiries made on behalf of buyers;
- Copies of any planning, listed building and building regulations consents and approvals;
- For new properties, copies of warranties and guarantees;
- Any guarantees for work carried out on the property;
- Replies to local searches; and
- A home condition report based on a professional survey of the property, including an energy efficiency assessment.
And additionally for leasehold properties
- A copy of the lease;
- Most recent service charge accounts and receipts;
- Building insurance policy details and payment receipts;
- Regulations made by the landlord or management company; and
- Memorandum and articles of the landlord or management company
The survey will need to be complied by a Home Inspector of which there is currently a national shortage. The government is hoping that many people will come into the industry and retrain as Home Inspectors.
Sellers will have to prepare a home information pack before they can market the property in any way. Even an advert card in your local Tesco will be illegal if you don’t have a sellers pack.
The estimated cost of a Home information pack is expected to be around £600 however it may be significantly more for those in and around the South East. Although the government claims that the costs would have to be paid anyway at some point in the process (normally by the buyer) there is a fear that mortgage lenders will still insist on their own surveyor inspecting the property, at the purchasers cost, in order to establish that it is suitable security for the loan. There is also some confusion as to how long the various searches will be valid for with most lenders insisting that they are less than three months old. If the property has taken six months to sell then the searches will have to be redone.
So, as yet there is still an air of confusion as to what exactly will need to be in the Home Information Packs, when they will be formally introduced and whether they will ultimately be successful in their aims.
Until 2007 the house buying process will stay as it is now so if you are looking for a quote for your conveyancing then please click here.
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