With the Home Information Pack deadline looming, everyone in the industry should seriously consider the implications the packs will have for their businesses and plan to ensure they maximise the commercial opportunities that will be available in the new era of home selling.
From June 1, all house sellers will need to arrange HIPs for their properties before they can be marketed. Now is the time to get the ball rolling so you are prepared before that deadline.
Over the past 12 months or so there have been many articles in the trade press focussing on the hype surrounding HIPs with themes such as ‘will they ever happen?’, their pros and cons and surviving in the HIP era.
But there has not been much practical advice that indicates what the industry needs to do before the arrival of the packs.
Basically, the industry needs a more positive approach to turn HIPs into a winning business opportunity. Here are some tips on achieving this:
With the introduction of HIPs a matter of weeks away, it is important to ensure you and your team are up-to-speed on the packs, from understanding the required contents to the authorised documentation that will have to be included within the packs.
A good starting point is the government’s information website at www. homeinformationpacks.gov.uk, where you will find useful information on the contents of HIPs as well as a handy events calendar listing relevant seminars on the topic.
You can increase your credibility as a company if you and your team can talk knowledgeably about HIPs, so keep an information leaflet next to the phone so that everyone can readily answer enquiries.
Also, consider providing updates via your website so customers can keep up-to-date on what they need to do when considering selling their homes after June 1.
Select your HIP providers
Now is a good time to choose your providers, yes plural. Do not commit to exclusive deals until you can make an informed choice.
A minimum of three HIP providers will offer you options to suit your customers’ requirements. It will also allow you to assess what you are looking for in a provider in the longer term.
Now is the time to decide how your business can benefit from HIPs. Identify what your commercial offering will be – whether you will offer free HIPs to customers and keep the cost inhouse, or partner with a provider to offer clients alternative payment methods, such as paying for the packs upfront to avail of possible discounts.
Also, consider what financial package would best suit your business. For instance, would you prefer not to get involved in seller payments for HIPs, i.e. the credit terms that allow sellers to pay on completion or after nine months, whichever is sooner.
Home Condition Reports
There will be many organisations aiming to provide HIPs to your customers, from estate agents to conveyancers.
With this in mind, look at differentiating yourself by offering Home Condition Reports as standard with HIPs. This will ensure clients’ properties stand out by providing potential purchasers with transparent sales while giving sellers peace of mind.
Hold a cheese and wine evening and invite customers and local people with leasehold properties to find out more about how HIPs will affect them if they decide to sell their properties?
Explain what it will mean to them when they sell, and encourage them to collate information and keep it in a secure place until they decide to market their property.
Ensure your customers have their HIPs assessed by a local conveyancer to check the appropriate Land Registry and search documentation. They will be able to provide customers with a summary of the key factors and findings from each report included in the pack.
When you provide your first few HIPs, keep in touch with the sellers and their buyers and ask for quotes regarding their views on HIPs and how useful they found them to be in the selling and buying process. Use the positive feedback to generate local publicity for your business and the advantages of HIPs in the home selling process.
If you promote the benefits of HIPs loud and clear to clients they will listen. They have not been reading the negative articles that many industry publications have been airing for the past year or so, so they won’t have any preconceptions about the subject.
Show people how HIPs will provide a more transparent sales process which should save time, money and the odd headache.
Making life easier for home buyers
Home Information Packs are intended to increase the transparency and certainty of the property sales process by having as much information on properties available upfront for prospective buyers as possible.
Presently, the mandatory contents of packs are:
• An index list of contents.
• A statement that summarises the terms of sale.
• Evidence of title.
• Standard searches including local authority, drainage and water.
• An Energy Performance Certificate.
• Where appropriate, commonhold or leasehold information (including a copy of the lease, details on service charges and insurance).
• A New Homes Warranty if applicable.
• Where appropriate, a report on a home that is not physically complete.
Optional documents include:
• A Home Condition Report.
• Guarantees and warranties.
• Other searches.
Fixed penalties will be charged to home owners who do not have HIPs in place when their properties are marketed. Estate agents can also be fined. The government claims that at the moment a typical transaction takes eight weeks from the time an offer is accepted to exchange. With HIPs in place, it is said this time could be halved
Trials of HIPs are taking place in Bath, Newcastle, Southampton, Northampton, Huddersfield, Cambridge and more recently Southwark in London and Gwynedd, Conwy and Anglesey in Wales.