The Home Report - Points to Consider06 March 2019
Written by James & George Collie
The Home Report has been with us in Scotland since 1st December 2008 and it is fair to say the opinion is divided on whether or not it has been a success or, as claimed by its supporters, provides value for money.
However, as the Home Report was introduced by an SNP Administration, it is safe to say that it will remain and be an integral part of the house buying and selling process until at least 2016.
Whether a buyer or seller, it should be borne in mind that the property valuation brought out in the Single Survey Section of the Home Report is little more than a guesstimate by a surveyor of the median price that might be agreed upon between a willing buyer and a willing seller.
The reality is, and always has been, however, that a property is only worth what someone is prepared to pay for it on a given day.
As ever, market forces, such a supply and demand, will play a significant role in what price a property achieves. Whether or not there are competing bids will also have a bearing. In the current market, it is highly unlikely that a property will sell for above valuation, unless there are competing offers.
It is perhaps misguided to regard a single survey valuation in the same way as one would regard the price of an ounce of gold or silver, for example. It is understandable for a seller to feel that he or she is making a loss by accepting a below valuation offer but, in reality, there will only be a true loss if the price accepted is lower than the price the seller paid for the property in the first place.
A further pointer to be borne in mind is that whilst most Banks and Building Societies will accept an in date Home Report (ie. a Home Report which is no more than 12 weeks old when considered by the Lender’s underwriter) certain lenders may insist on commissioning their own valuation. The cost of that valuation will be passed onto the buyer, and may be comparatively expensive as in addition to the amount paid to the surveyor, the “Valuation Fee” may incorporate an administration charge which is retained by the Lender.
As such, it is always prudent for a buyer to liaise with his or her Mortgage Advisor, or the Lender directly, at the start of the buying process to ascertain whether or not the Home Report commissioned by the seller will be acceptable to the intended Lender.
For more information on Home Reports when buying or selling a property, please contact Rory Cradock on 01224-581581.