Home Buyers Report : What is it?
A Home Buyers Report is a type of survey. Building surveys in themselves are a means by which the condition of a property can be assessed and are normally carried out or prepared on behalf of interested parties who are considering a property purchase either for self-use or investment.
The home buyers report (HBR) was introduced in 2009 and its format & makeup are specified by the Royal Institution of Chartered Surveyors (RICS). They are sometimes also referred to as Home Buyer Survey
Homebuyer reports are best suited for newer homes that are in a reasonable condition. They are NOT exhaustive studies of property condition, but will / should identify major or urgent issues with a property's condition. A homebuyers report should also identify any areas that should be looked at in more detail by way of a recommendation.
Home Buyers Report: Intended Use
A home buyers report can be useful for both identifying problems with a property and also for providing a reassurance of a property's condition. You should be aware that home surveys are often criticised for containing 'exclusions' & 'caveats' of areas that were not accessible and as such do not always provide the reassurance of property condition that was sought by the reports instigator. You should ALWAYS discuss such exclusions & caveats with your surveyor and in each case either take further advice on such exclusions or form a risk assessment yourself based on your discussions with third parties.
Types of Home Buyers Report
There are two primary types of Homebuyer report
- A Home Buyers Report & Survey : Includes everything from a RICS condition report plus advice on any defects that could affect the property.
- A Home Buyers Report with Survey & Valuation : Also covers the same detail within the RICS condition report plus a market valuation & insurance rebuild estimate. Like the previous report it will also include details of any defect that is likely to effect the property.
While the RICS home buyers report replaced the Home Buyers Survey & Valuation in 2010, both also being valid during 2009 -2010 it is important to understand the differences as stated by RICS. RICS stated that while the new home buyers report is an improvement on the home buyer survey & valuation as it is more 'consumer friendly' & of a streamlined format there are differences:
- A clearer layout enabling you to find the information / details more easily.
- The new HBR now includes a new section that is dedicated to the energy performance & efficiency of a property. This brings the new HBR up to date with the home buying reform act that was previously covered by the Home Buyers Information Pack (HIPS) which was abandoned by the conservative party on the 20th May 2010.
- Colour coded condition ratings of the properties condition are improved & clarified.
- The HBR has a more modern design.
- A HBR can only be carried out & produced by a member of the Royal Chartered Institution for Surveyors.
Benefits of a Home Buyers Report
It is important to remember that a RICS valuation as is normally carried out by a mortgage provider / lender is NOT a survey of the condition of the property. It is more a market valuation that is used to both assess & secure the lenders risk. Any serious condition failings of the property thereby becoming your liability.
While a home buyers report may seem an added expense more often than not it can save you money when you are contemplating buying a property. First of all it will provide you with a more formal & professional opinion on the condition of the property over and above that of your own assessment. It can even provide a pathway to price reduction via negotiation with the vendor based on the HBR content.
Conclusions
Both the home buyers report with survey & the home buyers report with survey & valuation (classified as level two surveys by RICS) provide an intermediate assessment of a property's condition that is denoted using a traffic light system. They contain far more detail than a basic mortgage valuation report. It is also important to remember that a home buyers report is less detailed than a full & complete property / building survey.
The home buyers report will not list every single detail of a building / property, but it will highlight areas of concern & suggest areas that may require further investigation. In general a HBR will report on all aspects of a property that are visible to the surveyor, they will not inspect under carpets, lift up floors or inspect the wiring.