Home Reports ‘continue to prove their worth’ in Scotland
As the Home Report prepares to turn ten years old this year, the Royal Institute of Chartered Surveyors (RICS) has argued that there is no doubt that it has found its place in the complex world of property transactions.
Introduced in Scotland amid a welter of controversy on December 1, 2008, the Home Report 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.
After initial misgivings, the RICS said 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.
Crucially, the RICS added, 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.
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, RICS said. His, or her, impartiality removes a lot of the emotion from the purchase or sale, it added.
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.
He said: “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.”
For Mr Curran, the misconceptions include the impression that valuations for one house should be the same as other houses in the street and that any surveyor registered with RICS can provide a Home Report.
He said: “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.”
On the second misconception the surveyor added: “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.”
Other misconceptions, according to Mr Curran, include that home Reports are weighted towards sellers’ interests since they are paying for it and are also required to be replaced every three months.
Mr Curran said: “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.
“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.”
Mr Curran added that a high valuation does not mean a high selling price.
“The valuation has to be realistic,” he said. “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.”
Mr Curran said: “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.”