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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