There’s a lot to be said for Scotland’s process of buying and selling homes. Sellers aren’t reliant on a chain of other successful house sales as is often the case in England, and the risk of being gazumped is minimal. Additionally, the house seller is legally required to produce a Home Report before it can go on the market.
But what is a Home Report, and what does it cover?
What is a Home Report?
A Home Report is an information pack for a property on sale. It’s put together by an independent surveyor, and they’re primarily used by potential buyers to review the home on paper before making an offer. They’re also useful for sellers to find and fix any issues that may delay or even prevent a sale later down the line.
The report consists of 3 sections, each covering different features of the property:
- The Single Survey (and possibly a Valuation) are a condition report and an estimation of the property’s value.
- The Energy Report is the Scottish equivalent to an Energy Performance Certificate.
- The Property Questionnaire highlights any additional information that may be of use (the property’s tax band, structural repair or extensions undertaken, parking facilities etc).
Both the Single Survey and Energy Report must be completed by a surveyor who’s certified by the Royal Institute of Chartered Surveyors (RICS). The Property Questionnaire is completed by the seller or their solicitor.
5 Rules of the Home Report
- You must have a Home Report completed by a RICS qualified surveyor before you can put your house on the market. The few properties that are exempt from needing a Home Report can be seen below.
- The Home Report must have been completed no earlier than 12 weeks before putting your house on the market.
- Once the property is on the market, it doesn’t have an expiry date. Should you decide to take your property off the market, you have 4 weeks to put it back on using the same Home Report. Any longer than that and you’ll need to get a new one.
- If a potential buyer requests your Home Report, you or your solicitor has up to 9 days to provide it, or risk being fined up to £500. You may charge the potential buyer a small sum to cover the cost of printing a hard copy and postage.
- Similarly, if you provide false information on the Home Report, you could be fined up to £500.
Properties that don’t need a Home Report
- New builds that are sold ‘off plan’.
- Properties to be demolished and redeveloped (you must have consent for both).
- A newly converted property that has never been used for residence beforehand.
- Properties that are evidently dangerous.
- Several homes that are to be sold as one (not sold separately).
- Holiday homes / seasonal accommodation (which can only be lived in up to 11 months of the year).
- ‘Right to Buy’ properties.
- Sales including residential and non-residential properties (e.g. a farmhouse on a working farm, or a shop and its first floor flat)
- Dual-use properties (both residential and non-residential).
What does a Home Report cover?
Home Report Part 1: Single Survey (and Property Valuation)
The single survey is a visual inspection of the building, checking for defects in the roof, floors, external and internal walls, ceiling, plumbing and electrical supply etc. The different features of the property are given a Condition Rating:
1: No repairs needed.
2: Repairs are needed, but they aren’t deemed serious.
3: Urgent/serious – you may wish to address these issues before the property goes onto the market.
Along with Condition Ratings, a single survey covers an accessibility review, and can (but doesn’t have to) include a Generic Mortgage Valuation, which is an estimate of the property’s value.
The valuation isn’t strictly necessary from the seller’s perspective (it’s mainly for buyers) should it come at extra cost, but it can be useful during negotiations. Even if you agree to get a valuation, the buyer may still need to get their own Mortgage Valuation to justify the property value to their mortgage company.
Mortgage lenders often require new Mortgage Valuations completing if the Home Report valuation is over 12 weeks old, or if it was completed by someone who isn’t on their list of approved surveyors. In any case, the buyer pays for the new Mortgage Valuation should their lenders require it.
Home Report Part 2: Energy Report
The Energy Report is essentially the same as an Energy Performance Certificate in that it gives an overview of a property’s energy efficiency. The surveyor will give your property an EPC rating (click here to find out what is an EPC rating) and suggest a number of ways to improve this EPC rating.
The Energy Report also estimates how much typical occupants would have to spend on heating and electricity, along with the calculated carbon emissions of the property in the space of a year.
Home Report Part 3: Property Questionnaire
The Property Questionnaire covers various other elements of your property that would be of interest to potential buyers. To name a few, these include:
- The property’s Council Tax band
- Whether the property is a listed building or is in a conservation area
- Alterations & extensions carried out
- Central heating
- Extra services (TV, Broadband, telephone etc)
- Responsibilities and charges for shared areas
- Boundary changes
- Notices affecting the property
- Guarantees and warranties (Electrics, central heating)
Why is a Home Report necessary?
The advantage of the Home Report is that buyers don’t have to commission their own survey and valuation, allowing them to review several properties for free. It was also designed to give potential buyers more confidence when making an offer. In that respect, the response to Home Reports in Scotland has been positive overall, so much so that it’s been suggested introducing a similar system in England and Wales. The Home Report has also provided an incentive for house sellers to carry out more maintenance and repair work before putting their properties on the market.
While it has to some extent dealt with the problem of surveyors setting artificially low asking prices, the Home Report does have its limitations. It’s ultimately quite a short non-intrusive survey, so the surveyors have been known to miss things. However, there are options for potential buyers to find out more with their own RICS surveys, such as a Home Condition Report, a HomeBuyer Report and a Building Survey.