The Home Condition Report (HCR)

A Home Information Pack does not legally need to include a HCR but it is an important addition which can give substantial benefits for both seller and buyer.

The Home Condition Report (HCR) contains information about the physical construction and condition of the property as it stands on the day of the inspection. HCRs can only be carried out by qualified Home Inspectors.

Sellers, buyers and lending institutions will be able to rely on the report. It will provide a simple, easy to understand rating assessment for each of the main elements of the property. The report is divided into eight individual sections:

Section A - explains the report content and extent of the inspection, giving definitions of the condition ratings.

Section B - contains general information about the property, summary of the condition ratings and insurance reinstatement costs.

Section C - details solicitor or conveyancer matters, Health and Safety risks and other risks e.g. subject to flooding

Section D - Exterior aspects, chimneys, roof coverings, gutters, walls, windows, claddings and external decoration. Each element is given an objective statement and a condition rating.

Section E - Internal aspects, roof structure, ceilings, internal walls, floors, built in fitments and internal woodwork. Each element is given an objective statement and a condition rating.

Section F - Visual inspection of Services includes gas, electricity, heating, water and drainage. Each is given an objective statement and a condition rating. A recommendation for a safety inspection or service by a registered engineer may be given in the objective statement.

Section G - Grounds and outbuildings details the inspection of permanent sheds and garages, patio areas and garden walls.

Section H - Energy Performance Certificate (EPC).

A three point scale will be used to rate each element;

'1' rating indicates either no defect present or if the works are very minimal and could be classed as normal maintenance;
'2' rating indicates that repairs are required but the home inspector does not consider these to be serious or urgent
'3' rating is applied if serious or urgent works are required.

The report will also contain other essential information including highlighting any health and safety risks and provide a reinstatement cost figure which can be used for insuring your property in the event of maximum loss. It will include an Energy Performance Certificate 'EPC' that will tell you how expensive your home is to heat and the best ways to improve this.

Example of the Home Condition Report

The Benefits of the Home Condition Report (HCR)

1. A HCR will give you better information upon which to decide your marketing strategy:
   If the homeowner and the agent are aware of the condition of the property, the asking price and method of marketing can be decided in the light of its condition
   
   
2. A HCR will allow for further investigations of problems, during marketing, to avoid delays after offer acceptance:
   Defects identified in the HCR can be addressed through some or all of the following:
   
   
   • Undertaking further investigations by specialist contractors;
   • Obtaining quotations for specified works;
   • Undertaking works and providing invoices to be included in the HIP;
     
     
3. A HCR allows evidence of repairs done to be directly linked to the report findings:
   If repairs are undertaken following their need being identified in a HCR, a contractor can be requested to set out in their invoice the specific work carried out, which can be related directly to the relevant item in the HCR and can be included in the HIP as an authorised document.
   
   
4. A HCR shows the agent and potential buyers that the sellers are serious, not just kite flyers:
   If your prospective vendor seriously wishes to sell, the prospect of committing to pay for the HCR should not be a significant factor in their decision as to whether to market the property and agree to a sale.
   
   
5. HCRs eliminate suspicion by potential buyers that the seller and the agent maybe trying to hide something:
   The production of a HCR will show that you are willing to subject to transparency about your property and that, if there are problems with the property, they have been recognised as legitimate and addressed before marketing starts.
   
   
6. HCRs save buyers the necessity of obtaining a survey and so will be more inclined towards your property:
   Buyers will be more receptive to properties with a HCR as they will be able to eliminate the concern about costs, hassle of arranging and delays in commissioning a survey and the potential for further delays and costs if the survey discovers problems.
   
   First time buyers will be particularly pleased to have the benefit of a HCR because they are often inclined to minimise costs by neglecting to have a survey - the HCR gives them confidence that they know what they are buying, without the costs.
   
   
7. HCRs will ease and speed up mortgage applications:
   Lenders are legally entitled to use and rely upon the HCR. They are increasingly wanting to use automated valuation models (AVMs) for assessing properties and linking these with the HCR is one of the biggest steps forward in speeding up the mortgage application process. As lenders increasingly use AVMs the costs of the mortgage application should reduce in line with the efficiency and speeding up of the process.
   
   
8. HCRs reduce the potential for sales falling through or difficult renegotiations:
   If the condition of the property is known before an offer is made, there is far less opportunity or justification for a buyer to attempt to reduce the price or withdraw from the purchase. This will drastically reduce the hassle, delays and suspicions which are so often brought about by last minute discovery of condition-related problems.
   
   
9. HCRs speed up the process between offer acceptance and exchange of contracts:
   Provision of the HCR should mean there are few if any reasons for delays in the process after offer acceptance. This is helped by the legal information being substantially available in the HIP. Thus the period between offer acceptance and exchange of contracts can drastically reduce, perhaps to no more than around two weeks. This reduces the window of opportunity for extraneous factors to disrupt a sale and for the opportunity for gazumping or gazundering to take place.

The HCR is undertaken by a fully qualified, insured, CRB checked and competent Home Inspector who is accredited by a government approved scheme.