As of 21 May 2010, Home Information Packs will no longer be required to market a property.
What does this mean to you as a client?
If you are selling a property, you will now just need to obtain an Energy Performance Certificate (EPC) to market and sell your house. If you are purchasing a property, we will have to obtain searches on your behalf and an additional cost will have to be paid (though see below about speeding the transaction or bargaining power as there are instances where the Seller may still obtain the searches).
The Home Information Pack (HIP) that used to be included a select number of searches that had to be put in place before a property could go on the market. The pack contained an index, the title documentation (official copies from the Land Registry), a local authority search, a water and drainage search and an Energy Performance Certificate (EPC).
The idea was that by supplying a pack upfront — legal fees would not be wasted as a purchaser could potentially have a quick 'health check' of the property before investing too much money into it.
The reality is that many of the searches were done on the cheap — e.g. personal searches which were not accepted by a mortgage lender.
This meant that in many cases, people would end up paying for additional searches anyway.
So what does this mean?
The impact of this is that now it will be cheaper for people to sell a house as they will save hundreds of pounds by not needing a hip — though, the purchaser will in most instances have to obtain the searches.
What would we advise?
If you are selling a house and really want it to go through as quickly as possible – pay for the local authority search, the water and drainage search and the EPC separately (you have to get the EPC anyway). This way, when the contract is sent over to the purchasers Solicitors, they will have information upfront that will prevent them from causing any delay.
If you are a purchaser — be advised that you may have to buy the searches (the searches will be needed by your mortgage company at the very least).
The cost varies from area to area but on average expect the searches to cost between £200 and £300.
- Historically (before HIP's came into force) the purchaser obtained the searches.
- We are sure many people will try to insist that the seller obtains the searches following the demise of the HIP.
- The reality is that the party in the strongest bargaining position may be the person who pays for them.
What do we get out of it?
NOTHING. In all honesty, the Solicitors will lose out — insofar as if our purchasers need searches now, we have to obtain them on their behalf, making contact with a search agent or three separate individuals, ordering, paying for and chasing the search results. Once we have the searches, we have to review them — all within our low fixed price which has not changed as a result of this additional work.
Remember, when we obtain searches on your behalf, we only charge you exactly what it cost us to get them for you.
Our no completion – no fee guarantee extends to our legal fees where the transaction fails due to default of the other party. Unfortunately, we cannot pay several hundred pounds worth of searches on your behalf under our no completion no fee guarantee.