Whatever your view on the controversial Home Information Packs (HIPs), they are finally here – and hopefully here to stay. The packs were the focus of many a long debate in the House of Commons and have undergone a number of changes along the way.
Unfortunately, the initial pack that was introduced on 1 August, has been somewhat whittled down from it’s original form. The final mandatory version of the pack includes an Energy Performance Certificate, local authority and water and drainage searches as well as the title deeds.
However, these mandatory parts of the pack are not the only inclusions allowed in a HIP. Indeed, to offer a service that stands out from their competitors, advisers should look into the benefits they could offer their clients by linking up with a provider that offers additional services with their HIP offering. These additional services can help to ease the home buying process – which, of course, should help to ease the role of the adviser.
HIP additions
So, what additions are there to the standard HIP, and how will they help benefit your clients?
Environmental reports can be offered alongside the mandatory HIP offering and can be an excellent way to reassure purchasers that they are getting a property worth the expenditure. Considering that purchasing a home is the largest expenditure that most consumers will ever make, a report that reassures them that their potential home is not at risk from man-made or natural disasters is a bonus.
The mandatory searches already included within the HIP can overlook vital information – indeed, many of those affected by the recent floods may not have known that their home lay on a flood plain. In addition, contamination, subsidence and planning permission for surrounding buildings are all things that potential purchasers might be worried about, so a report that puts these worries to rest can be the ‘deal clincher’.
Wait, I hear you say – your client is trying to sell the house so they don’t want to highlight all these problems. But a positive environmental report can actually differentiate them for the ‘competition’. Admittedly, a negative report could impact the value of the property but if your client is fairly sure of the ‘environmental integrity’ of their home then it can be a useful addition.
As an adviser, your client will be even more confident about your service if you were to offer a HIP with the option to carry out an environmental search. They may not choose to do so, but the knowledge of the market this demonstrates is sure to earn you ‘brownie points’.
Home Condition Report
Another useful addition to any HIP, the Home Condition Report (HCR), was originally due to form a mandatory part of the pack until a drastic U-turn by the government reduced them to a voluntary feature.
The HCR is an objective report, carried out by a qualified home inspector, which was initially introduced to lower the number of sales falling through as a result of poorly carried out surveys. Although it is obviously an advantage to the buyer to have access to this information before putting an offer in, it also helps the seller by ensuring that any offers made on the property are not subject to further surveys and further negotiations over price. This should speed up the mortgage application process considerably – benefiting buyers, sellers and advisers.
Finally, advisers can link up with a HIP provider that offers conveyancing services as an additional part of their offering. Yes, I know this is part of most packs, but some advisers forget this simple fact. By doing this, advisers can offer a quicker service to their clients by having their HIP and – eventually – conveyancing completed by the same provider, as well as earning two sets of referral fees, without having to follow up a separate instruction.
Distinguishing your service
Linking up with a HIP provider is a great way for advisers to offer a more complete service to their clients, as well as earning an extra form of revenue. However, simply offering a mandatory pack does not help to distinguish your service or offer any unique selling points to consumers. Environmental reports and HCRs are a great way to help your clients get the competitive edge in this market and speed up the mortgage process.
In an ever more competitive market, advisers must ensure they are offering the best service they can, to ensure consumers will be returning to their door next time they need advice.
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