Reap rewards from HIPs

All organisations in the property transaction industry are now fully aware that in order to remain competitive in the new Home Information Pack (HIP) economy, a strategy needs to be devised now, in order to keep up with the game. HIPs present a great commercial opportunity. Yes, it is a huge change for the industry, but with change there are a whole host of prospects available for the more enterprising firms.

There is a lot of speculation regarding the effect HIPs will have on each sector in the property chain – particularly with independent firms – with articles declaring a ‘decline in the number of independent conveyancing firms’, through to a boom in the number of estate agency practices that are likely to offer the ‘full package’; from developing the HIPs and marketing the property, through to offering the financial services support.

I believe, however, there is a great opportunity for all independent firms from each discipline: legal, estate agency, surveyors/home inspectors, lenders and brokers; to develop specialist HIP partnerships, to help create pockets of regional expertise. By collaborating together, the teams will have all the necessary local knowledge required to provide the home buying and selling public with a one-stop solution with regards to their sale of their property.

Regional HIP partnerships

Creating local HIP partnerships or consortiums will ensure the independent operators in the marketplace can actively compete against the larger corporate organisations, in what will be an extremely busy and competitive marketplace.

The home buying and selling public have an affinity with local independent operators; the personal customer service and knowledge of the local area is an excellent unique selling point, which should be marketed in order to attract future property vendors who are considering a sale.

Through establishing local partnerships, all firms will be able to feed business around the selected group members, in order to provide vendors with a fully comprehensive HIP offering, with the added benefit of the local knowledge. As a result, they will be in an excellent position to maximise the commercial opportunities surrounding HIPs, and will be well placed to compete in what will be an extremely busy marketplace.

The secret ingredient to make such partnerships work is technology. At Quest, we have a number of partnerships already using online systems and secure electronic links to seamlessly connect to the other member organisations. The system is able to electronically access each party at poignant stages of the HIP development; so for example, an automatic Home Condition Report (HCR) request will be sent to the home inspector for actioning, an automatic flag will be sent to the broker in order for them to contact the client to discuss their financial service requirements, and an e-mail will be sent to the solicitor requesting the search and legal data for the client’s HIP.

In addition, with an increasing number of firms becoming ‘PISCES-compliant’, organisations are able to electronically transfer information directly from one software package into another, removing the need to send hard copy data, and more importantly, the need to manually re-key data into various systems.

Technology will make regional partnerships a realistic reality. With each member interacting electronically, it will remove much of the anticipated paper-based administration and will ensure the HIP can be created as quickly as possible. This will ultimately provide consumers with an efficient ‘one-stop-shop’ service.

Who Should Be Involved?

• Estate agents

Estate agents are in arguably one of the strongest positions with regards to HIPs. They are in no doubt going to be the first port of call for any property vendor considering selling their property. This obviously creates a lot of opportunity, but also a number of new roles not traditionally associated with agents. For example, a majority of the pack’s contents were traditionally handled and assessed by solicitors, such as the searches or deeds. Estate agents should be looking to form relationships with local legal practices so any consumer enquiries related to the legal contents of the pack can be directed accordingly. The same applies for the HCR – close relations should be formed with local home inspectors or surveyor practices to ensure they are able to provide ongoing support regarding the development and translation of the findings in HCRs.

• Mortgage brokers

Mortgage brokers and intermediaries are in an excellent position to partner with both estate agency practices and HIP providers to become distributors of their HIP products. In addition, by establishing a partnership with agents and HIP providers, brokers are also in an excellent position to be able to offer targeted financial services advice to property vendors, who are in the early stages of bringing their property to the market.

• HIP providers

The obvious link for HIP providers is to develop relationships with estate agents, in order to provide them with a fully comprehensive pack offering. This would, therefore, remove the burden from estate agents of compiling the HIP, which would allow them to concentrate on their key business of marketing the property. HIP providers should also partner with local legal practices, in order to obtain the relevant legal contents, and also home inspectors, in order to obtain the necessary HCR.

• Solicitors/conveyancers

It has been stated that many of the larger HIP providers, such as the major estate agency organisations, may want to use their own conveyancers or those on their panels, in order to control the pack production from start to finish.

As a result, independent conveyancers could see a reduction in the number of instructions if they are not working closely with the independent agents, who are likely to have a greater influence on providing recommendations to vendors on which solicitors to work with.

One way of combating this problem is to consider a partnership arrangement with the independent estate agents. In order to continue receiving the continual flow of conveyancing requests, a relationship should be formed now to retain the level of requests received.

Alternatively, solicitors are in an excellent position to also become HIP providers, as many already have electronic access to much of the HIP contents, such as the search data. Plus, they can produce a ‘legal overview’, which could translate the detail included in the HIP, so consumers easily understand the key outcomes.

• Home inspectors/surveyors

Home inspectors will certainly need to develop links with HIP providers, in order to receive a continual flow of HCR requests. In addition, there is also scope for home inspectors to build close ties with mortgage brokers and lenders, in order to offer an additional property valuation service.

• Lenders

Lenders need to be considering ways in which they can become involved in the local groups, so their brand is visible to the vendor and potential purchasers via the HIP. Perhaps by either sponsoring local groups, or ensuring their brand is included on the pack’s mortgage certificates are a couple of considerations.

All in all, I believe this is an area that should be considered further by all parties in the property transaction chain. The technology to make regional partnerships work is already available and, by establishing the relationships now, each party will be fully prepared for the onset of HIPs before the 1 June 2007 start date.

Tom Parker is managing director of Quest Associates