How to choose a partner, not a business liability

by Tim Jones

When so many Home Information Pack providers are after your custom, how should you select the one that is right for your agency?

Rumour has it that estate agents are reluctant to jump to attention when their office door opens as it is more likely to be a Home Information Pack provider seeking business than a prospective client looking to buy.

In a tough, competitive market, should it bother agents which HIP provider they choose when apparently there is little differentiation between them all?

The answer is a definite yes, but how can agents identify those offering value for money?

Background research

Start with the firm’s name. If an agent is unfamiliar with a prospective HIP partner they should research its background, particularly if an internet-based transaction is involved. Agents should also always check providers’ websites to learn more about their product and service proposition.

I would be reluctant to give business to a firm I knew nothing about, or one not registered with the Property Codes Compliance Board, which oversees individual HIP providers to ensure they are code compliant to offer both sellers and buyers quality assurance. The PCCB register can be found at http://propertycodes.org.uk/register_of_firms/hip_providers.shtml

Rather than judging a firm according to price, agents should consider which firm will best match their business culture and decide whether they can offer the turnaround times and quality clients expect.

That said, agents must decide if they want to make a margin on the HIP. If yes, they should factor this into their client fee structure.

When ordering a HIP, agents must have complied with Regulation 18(1) of the Home Information Pack (No.2) Regulations 2007, which is the responsibility of the seller or an estate agent marketing on their behalf, or both if it is a joint sale.

Homes can be put on the market without a HIP, providing all the necessary documents have been requested and paid for or a commitment to pay for them has been made.

If the seller has told an agent they cannot pay for a HIP, the agent is in breach of the regulations if they market the property.

Agents face a daily fine of £200 for failing to ensure clients pay for their HIP when contacted by the HIP provider, so it’s important to ensure they comply with the regulations.

Agents should resist accepting instructions when a client has specified they can’t pay for it, with the intention of passing the responsibility for chasing payment to the HIP provider.

Why not always offer a deferred payment HIP at a slightly higher price with a nominal admin payment upfront? This ensures both agents and sellers meet the regulatory requirements.

HIPs have led to a significant improvement in the provision of personal searches from both a reduced cost standpoint and the speed and quality of the output.

However, certain local councils may restrict the volume of personal searches allowed per day, leading to delays. Agents should liaise with their HIP provider to find out turnaround times for the pack, so they can ensure they manage clients’ expectations in terms of its delivery.

Water search delays

Drainage and water searches are usually returned before local land charges, but there are a few water companies notorious for causing delays. Again, agents should liaise with both their HIP provider and their clients to avoid any misunderstandings.

Finally, in terms of HIP format, for many sellers an electronic version will suffice, but there are likely to be buyers who require a hard copy when viewing their prospective home.

Although the legislation allows agents to make a reasonable charge for a hard copy of the HIP, it may not be very customer friendly to pass this on. Instead, agents should research the cost of a hard copy with their HIP provider and ensure they leave sufficient time before a viewing for it to be produced.

HIP providers continue to expand their services and offers, so agents should choose carefully and have a partner rather than a liability. And agents with established HIP provider partners should regularly review the service they are receiving, to ensure they are offering clients real value for money. 

Research your prospective HIP provider

• Ensure it is PCCB-registered

• Consider whether you want to make a profit margin on the HIP

• Ensure compliance with Regulation 18(1) of the Home Information Pack (No.2) Regulations 2007

• Consider the best HIP format for your clients

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