Guide to home inspector and home condition reports

What is a Home Inspector?

Imagine you are about to buy a used car… Although it might look all right from the outside, there is no way of knowing for sure that everything inside is working as it should. If, like most of us, you were not an expert in auto mechanics, it would be a sensible idea to have the car looked at by someone knowledgeable. A Home Inspector works in a similar way. He or she is a licensed professional required by law to have completed the ABBE Diploma in Home Inspection and will know exactly what to look for.

What does a Home Inspector do?

A Home Inspector will carry out a detailed visual inspection of your home, a visit that usually takes from 1 to 4 hours, depending on the size and condition of the property. After this, he or she will produce a document called a Home Condition Report, an important part of the Home Information Pack (more on this later). Also, he or she will be qualified to write an Energy Performance Certificate. Demand for Home Inspectors outstrips supply, so advance booking is important!

Home Condition Report

It will show you any urgent or serious defects, and also give you a general overview of the rest of the house. Briefly, here's what you'll find in the Report's several sections:

• Section A – Describes the Home Inspector's terms, and what parts of the house he or she will not inspect. Also, this section describes how each inspected part will be rated.
• Section B – General info about the house. This section would be of special interest to the bank in cases where the buyers are taking out a mortgage.
• Section C – Legal info for conveyancers and others. Also, health and safety points that are not really 'defects'.
• Section D – Lists all the parts of the home that are inspected from the outside, such as windows or chimneys, with a rating of their condition. There would be descriptions of any serious or urgent problems.
• Section E – Same, but those parts inspected from the inside, such as ceilings, along with reporting signs of damp anywhere in the house.
• Section F – A visual inspection of electrical and other services. Bear in mind that the Home Inspector will not test any of these, just report on their condition.
• Section G – Outbuildings, such as garages and sheds, but not swimming pools or other leisure facilities.
• Section H – The energy report, and, if appropriate, how the house can be made more energy efficient.

How is this Report useful to me?

As a buyer, a Home Condition Report will show you the actual condition of the property, so you can make a more informed offer. It will also help you avoid any unexpected bills once you do move in.
As a seller, the report will help you market your home, since you can decide on a realistic asking price, or choose to have any work done (at a better cost/benefit to you) before selling.

HIPs

HIPS is short for Home Information Pack. It is a Government scheme to simplify and hopefully speed up the process of buying and selling property. It is estimated that about £350 million is lost every year due to property purchases that are unfulfilled because the buyers find problems with the house before completing the purchasing process. By the 1st August 2007, every seller in England and Wales wishing to put a property for sale on the open market will have to provide a Home Information Pack. (This date was originally planned as 1st June but was put back at the end of May by the government following pressure from opposition MPs and a legal challenge by the Royal Institution of Chartered Surveyors)

What exactly is in a Home Information Pack?

The Home Information Pack is a collection of documents. It has to include these required documents:

• An Index - A list of the Pack's contents.
• A Sale Statement - A short version of the terms of the sale.
• Evidence of Title – Proof of ownership of the property.
• Standard searches –Water and drainage searches will tell you if there are any liabilities regarding sewers or mains, for example, if public pipelines run close to the house. Other searches will tell you if the house is good standing with the local authority.
• An Energy Performance Certificate to be produced by a Licensed Home Inspector. This will rate the energy efficiency of the home from A to G, just like fridges. It will also include tips on how to make it more efficient. Usually, this service can be included in the visual inspection, for an additional fee (around £25 in England).
• Common hold information – Common hold refers to the parts of the property (usually on the outside of the main property unit) that have two or more owners. It is the same as 'Law of Tenement' in Scotland, or 'Condominium' in America. This section will only appear if there is common hold attached to the property, but if it does appear, it should include a copy of the Common hold Community Statement.
• Leasehold information – Tells you who owns the land your property is in. Again, this section will only appear if the property is in leased land. If so, this section should include a copy of the lease, as well as information on service charges and insurance.
• New Homes Warranty – You will only see this section if the home is new.
• If the home is physically incomplete, a report will be included giving details.

A Home Information Pack can also include the following authorised documents. These documents are up to the seller to include, but most are expected to do so:

• A Home Condition Report – This section was not included in the original Home Information Pack Regulations of 2006, but will be included as an authorised part of the HIP. The Government considers this document particularly important, and will encourage its inclusion.
• Guarantees and warranties – Other than the ones mentioned above.
• Other searches – These will vary from case to case, and may include a Building Survey, a RICS Homebuyer Survey, and others.

How would a Home Information Pack benefit me?

As a Buyer.
There are several clear advantages for you as a buyer:

• Speeding up the process – It's one of the main reasons for having all this important information easily available in one place.
• Transparency – Right now, there's always a chance that important information about the home wouldn't be available to you until after the sale terms are agreed. HIPs should solve this problem.
• Better service standards – Agents providing Home Information Packs will be required to belong to an approved redress scheme. This means the customer will be able to complain to an independent industry body if not satisfied with the service.

As a Seller.
If you are the seller, the advantages of a HIP are not so clear, other than the fact that failure to provide one carries a fine of £200. On closer inspection, however, the time saved in the buying process should be an advantage for the seller as well as for the buyer. In any case, choosing a Provider registered with the Association of Home Information Pack Providers (see webpage below) would be best. Look for qualifications like evidence of professional indemnity insurance and registration with the Independent Property Codes Adjudication Scheme (IPCAS). There is no official set price for HIP Provider services, ranging from £700 to £ 1,000 so it is a good idea to shop around!

Further reading

• Official Home Information Pack website - Provides latest news and detailed updates.
• The Association of Home Information Pack Providers webpage.
• Everything relating to land registry: commonhold, leases and such, including official Government updates.

Hannah Shanks - Editor