It was in December of 2008, in the wake of the first green shoots of recession that a seismic change took place in the Scottish property market.
The introduction of the Home Report made it mandatory for any person wishing to market their residential property for sale, and make it readily available to any prospective purchaser.
There are cases where properties are exempt from provision of a Home Report including groups of property to be sold as a portfolio (but not individually), property fit only for demolition and where sales are taking place between known parties in a private transaction. For the majority of house sellers, however it is mandatory to provide the Home Report if the property is to be marketed in any way including a handmade sign in the garden.
The Home Report consists of three distinct documents, the single survey, the energy Performance certificate and a property questionnaire which must be completed by the seller.
The first two elements must be prepared by a chartered surveyor and registered valuer who is competent and familiar with the area in which he is carrying out the valuation.
There are some myths surrounding home reports. The most significant of which is the shelf life. It does not in fact have a shelf life and it is expected that any prospective purchaser will realise from the date of inspection that the condition of the property or the valuation may have changed since that initial inspection date.
The confusion arises from the fact that banks and lenders generally do not accept any valuation report which is more than 12 weeks old.
Competent and reputable qualified surveyors will provide a fourth element alongside the home Report, although it is not in itself a required part of the report. This fourth element is a generic mortgage valuation.
Lenders will take transcriptions from trusted surveyors who have carried out a home report and generic mortgage valuation, however the report will not be accepted if it is more than 12 weeks old.
Consequently if the property is being sold after a 12 week period there are two options.
1: The purchaser obtains a valuation report which is acceptable to the bank and this will incur an additional fee to be paid to the bank and part of that will go to the surveyor.
2: The seller instructs a replacement home report from the original surveyors who, will then revisit the property, replace the report and the generic mortgage valuation which can then be transcribed to the chosen lender.
The second option is generally cheaper than the first, all be it paid by the seller rather than the purchaser. Replacement reports carried out the Helensburgh office range between £100 - £150 inclusive of VAT, largely dependent upon geography.
The geographical scope of the Helensburgh office
The two incumbent surveyors in our Helensburgh office are the most travelled in the entire company of Allied Surveyors.
The office covers two distinct areas in West Dunbartonshire and Argyll and covering post codes G82, G83 & G84 which includes the towns of Dumbarton and Helensburgh and the villages of the Vale of Leven including Alexandria, Balloch, Renton, Jamestown and Bonhill. They also include the rural areas out to Gartocharn and around Loch Lomond.
The jewel in the crown is perhaps is the town of Helensburgh and its close neighbours, Rhu and Cardross with the area extending down the Gareloch towards Garelochhead and around the Rosneath peninsula taking in Kilcreggan, Cove, Rosneath and Clynder.
The office also carries out Home Reports in an area which it has been working in for more than 20 years, i.e., mid and south Argyll. Our travels take us from Helensburgh out to Arrochar, over the Rest and be Thankful, down to Lochgilphead and from there down southwards to Campbeltown.
Alternatively our travels take us along Loch Lomond to via Crianlarich and Tyndrum to a town of Oban where again we carry out surveys between Oban and Lochgilphead all the way down the west coast.
It is also our remit to carry out valuations and surveys on some of the Hebridean Islands, the most northerly of which is the island of Lismore just north of Oban and the most southerly is the island of Islay, Queen of the Hebrides.
It is a quirk of the postal codes that we do pass through territories which are covered by other Allied offices, e.g, Stirling, Dunoon and Fort William, en-route to the survey destination in our allotted post codes.
As you can imagine, there is a huge diversity of property ranging from the small traditional tenement flats in Dumbarton and Helensburgh to the large detached period villas and mansions in the conservation area of Dumbarton and in Helensburgh, Rhu and the Rosneath peninsula.
In the bustling town of Oban, there is a thriving market, particularly for flats and the great diversity of property from the small tenement to again the large detached period villas in this vibrant town, the principle conurbation on the west coast of Argyll.
Heading south from Oban, there is again a great diversity of property, predominantly rural in style, all the way down to the town of Campbeltown on the Kintyre peninsula.
The island properties are always interesting and varied within their own micro economy and market.
Helensburgh covers a vast geographical area but to a large extent, one of low population and households.
How much do Home Reports cost?
This is a vexed question as most prospective house sellers do tend to approach an Estate Agent in the first instance when considering placing their property on the market.
The house seller will invariably be offered the name of a Chartered Surveyor or indeed offered a ‘package’ which incorporates the Home Report fee.
As a general guide we would advise that the cost of a Home Report prepared by our Helensburgh office ranges from around £300 + VAT increasing by £100 increments as the estimated property value increases through the bands of valuation, i.e. £0 - £100,000 - £200,000 etc. Consequently it is likely that the cost of a basic lowly small tenement flat would be in the region of £300 + VAT, while the larger detached period properties could be up to and above £1,000.
It is always possible to discuss the fee with a reputable local surveyor and he may be able to offer a reduction in the fee depending on various factors including the location of the property, the difficulty in size of survey and indeed whether the local office does have previous knowledge of the property upon which they can rely.
Buyer and seller beware!
In many ways the pit falls which can be experienced in engaging a surveyor for a Home Report are similar for both buyer and seller.
Whether you are buying a property and utilising and existing Home Report on that property or whether you intend to sell the property, there are some basic checks that should be considered.
1: Is the surveyor locally based and does he have sufficient local knowledge to carry out a knowledgeable and reasonable assessment of the property?
2: If a surveyor is truly independent, then only that surveyor can negotiate on his fee and if ‘discounts’ are offered by an agent, this may indicate one of several possible scenarios including:
A: The agent is to an extent subsidising the cost to be paid to an independent surveyor. This may be for a temporary period to attract business, effectively using the home report fee as part of his marketing strategy.
B: For those situations where a report is effectively being offered ‘free of charge’ it should always be borne in mind that ‘there ain’t no such thing as a free lunch’.
There may well be other costs associated with instructing through that agent and there may indeed be a specific business association between the agent and the surveyor
Sellers point of view
1: Ensure that appointed surveyor can act independently and has good sound local knowledge and competence. This is important, not only from the point of view of obtaining an accurate assessment on your home but also in generating confidence in the report by prospective purchasers.
2: Do not always by guided by the cost of the report as the total cost of marketing has to be looked at holistically and the surveyors fee should be quite independent of any fees paid to the Estate Agent.
3: Do not afraid of categories ‘2’. It is understood that where there is a category ‘3’ (urgent repair required) effort should be made to carry out the necessary repair and eradicate the category and reduce the categorisation where possible. It should also be borne in mind that while a particular element of the property may be categorised at ‘3’, this does not necessarily mean that the cost of the remedial work will be high, i.e., a localised leak in a roof may not cost much to fix but it is a category ‘3’ as it is a current problem that must be addressed immediately.
Categories ‘1’ are clearly not a problem, however categories ‘2’ frequently disturb sellers without need. Categories ‘2’ identify elements where repairs will be required in the future and covers a multitude of sins including older elements of the fabric which are ageing and indeed elements of the interior which have seen better days.
It is important that the surveyor highlights perceived ‘flaws’ in a property which will be evident to a prospective purchaser, otherwise there is a risk that that purchaser will then use the lack of comment on these flaws to reduce his offer.
This is of course more significant in areas out with the larger conurbations where the property market has not recovered and is not ‘booming’ in the same way as it is for example in Glasgow and the surrounding areas.
4: Give the guy a break!! – The surveyor has no axe to grind and is there to provide a disinterested and honest opinion on the property and its value. He will have to justify that valuation to the eventual end user of end client, i.e., a bank or lender and consequently he must have comparable evidence and a good rationale behind his valuation.
From the purchasers point of view
1: Ensure that the report has been carried out be a competent local qualified surveyor who is independent from the agent that is selling the property.
2: Consider carefully that the independence of a report obtained via an agent who is advertised ‘free’ or greatly discounted fees as it should be the independent surveyor that is offering any discount.
3: Bear in mind that while the home report is much more detailed than the mortgage valuation which was previously relied on by the vast majority of those people making the largest investment of their life in buying a property, it is not a full structural survey and does not seek to point out every small defect.
The overall condition of the property should be reflected in the valuation, so far as it is possible and just because a particular defect has not been highlighted it does not necessarily mean it has not been taken into account in the valuation.
4: The surveyor may not discuss or provide any additional information on a property after carrying out the report.
If however, there is an ‘approved purchaser’, that purchaser or his agents are entitled to contact the surveyor and clarify any issues which are raised in the report.
The surveyor should not discuss the value but should be able to answer any questions on construction and defects which he has highlighted.
Whether you are a house seller or house purchaser, it is always worth contacting your local surveyor if you require any advice.
We like to think that you will receive a friendly and professional reception should you choose to do so at our Helensburgh office. To start your home report simply fill in this form and we will get back to you within 24 hours.