Selling a property in Scotland differs in several ways from the process in England and Wales. For example, as a seller you need to get a Home Report before you can put your home on the market.
While in England and Wales the buyer conducts searches and surveys to establish the condition of the home, in Scotland, it’s the seller who does all that.
The buyer gets the information before they make an offer to ensure they have all the relevant information. Once the offer is accepted and the solicitors have negotiated the purchasing conditions, it’s legally binding, hence why the buyer needs all the documents beforehand.
And the Home Report is the way the buyer obtains all the information they need. So let’s delve deeper into this topic and find out what it contains, when it’s needed and how a seller gets it.
What the Home Report consists of
Since 1 December 2008, most domestic properties marketed for sale in Scotland are required to have a Home Report. It comprises three parts:
- Property survey
- Energy report
- Property questionnaire
The survey must be performed by a qualified surveyor and is a visual inspection of the property that includes its condition, its accessibility and any repairs that may be needed.
There are three types of property survey the seller can choose from:
- RICS Level 1: this survey looks for visible defects and gives an overview of the condition of the building. It also highlights any issues that need further investigation.
- RICS Level 2: this survey assesses the properties condition, looking out for any problems. It also gives advice on any issues found and repairs that need doing.
- RICS Level 3: this is a full structural survey giving an in-depth account of the property’s condition. It also advises on repairs and associated costs.
It’s then up to the seller if they want to make those repairs themselves or leave it to the purchaser. It will also include a valuation and an estimated reinstatement (rebuilding) cost for insurance purposes.
Since 9 January 2013, the Energy Performance Certificate (EPC) findings must be included in any advertising of the property.
It must also include the details of any Green Deal plan, as the purchaser will become responsible for any repayments. The EPC must be supplied to a potential purchaser even where no Home Report is required.
The final part of the report, the property questionnaire, is made up of sixteen categories, which include:
- The council tax banding
- Issues that have affected the property, such as fire or water damage or asbestos
- Alterations and extensions
- Details of any specialist work or guarantees
- Details of any notices that could affect the home
Together, these three sections provide potential purchasers with considerable information about a property prior to any offer being made, helping them to make an informed decision about whether they wish to buy it.
The report must be provided within nine days of requesting it, and a reasonable charge may be levied for providing a copy.
If the report is not supplied within the nine days, the local council’s trading standards department can impose a fine of £500.
However, there are some exceptions to this as well:
- If the seller doesn’t believe that the person requesting the report is a serious potential purchaser
- If the seller doesn’t believe that the purchaser can afford the property
- If the seller preferred not to sell the property to the potential purchaser, as long as this is not for illegal discriminatory reasons
Costs
On average, the Home Report will cost between £400 and £1,500, depending on the size and value of the property and what type of survey the seller chooses.
The cost of the survey will also depend on the value of the property: the lower the value, the cheaper the surveys will be.
Given the big differences in price, a seller might be tempted to opt for the level 1 survey to keep costs down. However, it’s advised to choose the type of survey according to the property rather than the price.
Older properties, or properties in poor condition, need a level 3 survey so the seller and buyer fully understand the repairs needed. Whereas with a new home, a level 1 survey is likely to suffice.
Make sure you get quotes from different companies, so you get the best price.
When the report isn’t necessary
While for most properties it will be necessary to have the report, not every property requires it. There are some exceptions to this rule, which include:
- Private sales where the property isn’t being advertised on the open market
- Where the property has been on the market continuously since before 1 December 2008
- New homes that are bought off plan or have never been occupied before
- Properties that have been converted into homes but have not yet been occupied as a home
- Right-to-buy homes
- Properties that are used for both residential and non-residential purposes
- Holiday homes that can only be used at certain times of the year. This doesn’t include properties that can be used at any time of the year, but are only used sporadically
Your solicitor will be able to advise you if your home will need the report or not.
A home may be taken off the market for up to four weeks without a new report being required. However, should the home be on the market for more than three months, it may be necessary to have another report commissioned, as sellers may be unwilling to rely on a report older than twelve weeks.
Personally, I really like the idea of having all relevant information available when buying property. Too many times I’ve looked at a property in England and loved it, only to be put off when I get the survey back.
In these situations, this report would have been invaluable to me, and it’s one of the things I most like about the process of buying and selling property in Scotland.
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Conclusion
The Home Report plays a big part in the property buying and selling process in Scotland. It provides the buyer with all necessary information about the property, so they can make an informed decision whether to make an offer or not.
While it adds costs for the seller, it does reduce the stress of having to wait for a survey to come back. We have been in this decision before and it’s horrible. Even if you think your home is in good nick, you never know what a survey might bring up.
Having done a survey before you put your home on the market means you can be sure there won’t be any surprises. And it gives the seller a chance to make any necessary repairs too.
Because the property buying and selling system in Scotland works differently to the rest of the country, this report is vital. You can find out more about how the system in Scotland works in our handy guide.
