4 JUL 2018
The Home Report, which was introduced in Scotland amid controversy, will be 10 years old in 2018.
There is no doubt that it has found its place in the complex world of property transactions.
After initial misgivings, the new system has been embraced by the mainstream of the surveying profession and many selling agents, who now accept that Home Reports are working better than ever anticipated, allowing both buyers and sellers to make informed decisions.
The new system, rolled out on 1 December 2008, radically altered the process of buying and selling houses in Scotland by introducing a single survey with a valuation, a property questionnaire completed by the seller and an energy performance certificate.
Crucially, the reports have brought an unprecedented degree of clarity to the marketplace on opinions of property value. Everyone is now working to similar parameters and, as a result, there is greater stability in the pricing structure and less price inflation.
The reports have brought an unprecedented degree of clarity to the marketplace on opinions of property value. Everyone is now working to similar parameters and there is greater stability in the pricing structure.
This is due largely to the fact that the opinion on value is given by a chartered surveyor, an independent and heavily-audited property professional with no vested interest in the process. His, or her, impartiality removes a lot of the emotion from the purchase or sale.
However, Eric Curran, managing partner at DM Hall, warned that while property professionals are working well with Home Reports, there are still several misconceptions about them among the general public. "While property experts are working with Home Reports all the time and appreciate just how much of an asset they are in the marketplace, buyers and sellers are not so familiar with them and can still have unfounded concerns about them."
This ignores that every property is unique and that the number of factors affecting valuation is great – such as location, size, style, condition and enhancements.
This does not take into account the world of difference between providers. Sellers should confirm that the surveyor they instruct is on lenders’ panels; that he or she is aware of local market conditions; and that he or she is fully independent.
Chartered surveyors are independent for a reason. They provide unbiased and reliable reports so that everyone involved in the process can rely on the conclusion. The surveyors risk and liability continues long after the sales transaction, therefore, they have to be independent.
Not true. Only if a Home Report is more than three months old will a lender and/or purchaser need an up-to-date valuation at the point of sale.
Wrong. The valuation has to be realistic. That is why professional surveyors are used. If the valuation is too high, the sale process will be prolonged with attendant costs and frustrations. Blight can also adversely affect property value if marketing is prolonged.
Curran says: "By and large, Home Reports have achieved the effect on the market that was intended. The legislation hoped to achieve three things: an end to multiple surveys; an end to the market-distorting practice of low asking prices; and a general improvement in the housing stock. Surveyors have helped to make the process successful since they are demonstrably independent of other potentially vested interests in the house selling/buying process. Buying a house is the biggest transaction most people will make in their lives. It is important that they have faith and trust in the procedures and Home Reports have gone a long way towards creating just that environment."