Mortgages Big Changes In The Buying And Selling Of Houses by NiceTime

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									Title:
Mortgages. Big Changes In The Buyin
g And Selling Of Houses.

Word Count:
866

Summary:
On June 1 st 2007, the law concerni
ng the buying and selling of houses
 changes. From that date onwards ev
eryone who wants to sell a house ha
s firstly to prepare a Home Informa
tion Pack (HIP).

And if you don't? You're in the fra
me for a £200 fine! It's also proba
ble that estate agents will also in
sist on you having the Pack ready b
y the time they put your home on th
e market. Certainly, buyers' solici
tors won't do a thing until you pro
vide the Pack. All in all, you don'
t hav...


Keywords:
mortgages,packs,information


Article Body:
On June 1 st 2007, the law concerni
ng the buying and selling of houses
 changes. From that date onwards ev
eryone who wants to sell a house ha
s firstly to prepare a Home Informa
tion Pack (HIP).

And if you don't? You're in the fra
me for a £200 fine! It's also proba
ble that estate agents will also in
sist on you having the Pack ready b
y the time they put your home on th
e market. Certainly, buyers' solici
tors won't do a thing until you pro
vide the Pack. All in all, you don'
t have an option – you'll have to g
o along with the law.

So what has to go in the Pack?

The Government has yet to confirm t
he final details but at the moment,
 it proposes that your Pack must in
clude the following information:

Search results from H.M. Land Regist
ry

Replies to anticipated initial enqu
iries – these are the currently rai
sed by the buyer's solicitor
Copies of any planning, listed buil
ding and building regulations conse
nts and approvals. If you don't hav
e these, you'll need copies from yo
ur Local Planning Authority

And for new properties, copies of b
uilding warranties, electrical test
 certificates, and any other warran
ties or guarantees attaching to the
 property.

A draft sale contract

It is also proposed that the Pack s
hould contain two items currently o
btained by the buyer:

A professional independent survey o
f the property called a Home Condit
ion Report. This is expected to be
mid-level survey like the current H
omebuyer Survey and will offer far
more information than a lender's va
luation report – but the Government
 has yet to announce the details. H
owever, it seems likely that the Re
port will have to comment on the pr
operty's state of repair, it's ener
gy conservation efficiency, the num
ber and type of rooms and parking a
rrangements. Both buyers and seller
s will have a legal right to rely o
n this Report and there'll be no ne
ed for buyers to obtain their own r
eports or surveys. We expect lender
s to make their own valuations as t
hey do now, but they'll want to max
imise the use of the new Home Condi
tion Report to improve their valuat
ions and cut costs to consumers.

Replies to searches made of the Loca
l Authority


In addition, if the property is leas
ehold:

A copy of the lease

The most recent service charge accou
nts and receipts

Details of the building's insurance
  and receipts for the premiums paid
.

And finally, any regulations made b
y the management company or landlor
d
And how much is all this going to c
ost? The Government believes that t
 he Pack is likely to cost sellers
around £825 including VAT. But they
 claim these are not additional cos
ts.

The Government make the following po
ints:

The HIP transfers responsibility fo
r obtaining local searches and a ho
me condition report from the buyer
to the seller. But since most selle
rs are also buyers, the costs will
usually be balanced out by correspo
nding savings and benefits. We agree.

The Government also say that most s
ellers won't have to pay up front f
or the pack. We very much doubt tha
t. Someone is going to have to pay
and we doubt whether solicitors or
estate agents will pay upfront on b
ehalf of the seller. The seller is
going to have to fork out as soon a
s the property is put up for sale.
Some commentators predict that this
 will act as a brake on properties
coming to the market. We think that
 it will dissuade all but the commi
tted sellers – those simply wanting
 to test the market will probably b
ack off. In practice this will be a
 good thing, but we agree that it w
ill reduce the amount of property o
n the market.

The Government believes that market
 forces will keep down the prices f
or preparing Home Condition Reports
 and Home Information Packs. We are
n't so confident about this. It ver
y much depends on how estate agents
 and solicitors adapt the pricing w
ithin their fee structures. Expect
some very creative pricing, especia
lly from estate agents! It's certai
nly going to pay you to shop around
 for a good deal.

Every year around 30% of agreed hou
se sales fall through. The cost? At
 least £350 million each year! It's
 the Government's hope that the Hom
e Information Packs will greatly th
e numbers falling through and avoid
 much of these wasted costs. We won
't argue against that but the Natio
nal Association of Estate Agents di
sagree with us.
They think the new Packs will simpl
y shift the existing problems from
the middle of the selling process t
o the beginning. Other commentators
 believe that HIPs will do nothing
to reduce gazumping or indeed, the
tricks employed by some of the less
 reputable estate agents.

Our general view is that if the pac
ks help to identify problems before
 everyone starts incurring cost and
 instructing solicitors, then surel
y that's for the better? We say bet
ter to have problems out in the ope
n at the start than stumble upon th
em half way through the selling pro
cess.

We just hope that all these changes
 in the buying and selling houses d
on't result in a bureaucratic night
mare. Over 7,500 inspectors will be
 needed to carry out the new Home C
ondition Reports and getting them a
ll trained, qualified and registere
d in time may yet prove to be that
fly in the ointment!

								
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