What Are Home Reports in Scotland and Do I Need One?
Since 1 December 2008, anyone who wishes to market a property for sale in Scotland must obtain a Home Report. There are limited exceptions: for example, newly-built properties and genuinely off-market sales where the property is not advertised at all. However, in the vast majority of cases, the seller must obtain a Home Report prior to placing their property on the market and they, or their agent, must make it available to prospective buyers and their agents for the duration of the sale. The Home Report consists of three elements:
- Property Questionnaire
- Energy Performance Certificate (EPC)
The Property Questionnaire is completed by the property seller and it contains a lot of information that is useful to a potential buyers. This includes details of the Council Tax Band of the property and details of any alterations that have been carried-out on the property.
The Survey is carried-out by a Chartered Surveyor (a surveyor regulated by the Royal Institute of Chartered Surveyors). It rates the condition of the property, as well as providing the surveyor’s assessment of both the cost of rebuilding the property and the market value of the property for mortgage purposes.
The Energy Performance Certificate (EPC) can be produced by any person who is licensed to produce EPCs and it rates the energy efficiency and the amount of CO2 that a property produces.
The large firms of Chartered Surveyors produce Home Reports. They provide both the Survey and the EPC elements of the Home Report and give the property seller a means to input information into the Property Questionnaire through an online form. The surveyors then produce all-in-one documents that contain all of the elements of the Home Report. Other non-RICS registered companies do produce Home Reports but they have to obtain the three required elements from different parties before packaging them together into one bundle.
Home Reports have divided opinion in the property world. The intention behind the single survey aspect of the Home Report is that buyers and their lenders accept the Home Report as their survey on the property and therefore have no need to commission their own. In the majority of cases, this is how events play out. However, buyers still have the option to request their own survey if they wish or if their lender insists on it. If the buyer is prepared to accept the Home Report without commissioning their own survey, and/or if the buyer’s lender is prepared to accept the Home Report for the purposes of the buyer’s mortgage, Home Reports can save the buyer money during the property buying process.
A certain period of time after the Home Report was initially created, a buyer’s mortgage lender will often insist that the Home Report is ‘refreshed’ or updated in order that they can rely on it for lending to the buyer. Since the seller has already paid to have the Home Report produced in the first place, it is a matter of negotiation between the seller and the buyer as to who will cover the cost of this.
We would recommend that property sellers arrange the Home Report through their solicitor estate agent for a number of reasons. First, some online, discount Home Report providers obtain the Home Report survey from a chartered surveyor whose surveys are not accepted by some mortgage lenders. This essentially renders the Home Report far less valuable to any potential buyer as they will have to obtain another survey for their mortgage lender. Second, the Home Report contains a valuation that may have a significant effect on what a buyer is prepared to pay for your property. Your solicitor estate agent will also be able to fight your corner and to provide comparable sales data, if it is required, to support the valuation that you are hoping buyers will see in the survey element of your Home Report.
If you are thinking about selling your property, please do get in touch with us by calling 0345 646 0208 (Option 1) or email [email protected] to organise a free property valuation or to have a preliminary chat with us about the selling process in Scotland. Our valuers can help you with suggestions that will maximising the appeal of your property to buyers and are happy to discuss any concerns that you have about securing your next home.
For more tips about preparing for a property valuation, you can also check out our YouTube video, Getting the Best Possible Property Valuation.