Hips

[Muskoka]

• It is anticipated that a HIP will be valid for a period of one year although this has yet to be confirmed by the government. However, searches contained in the HIP are valid from the buyer’s point of view for 3 months only. Once the HIP expires, you will need to produce another Pack to carry on marketing your property.

So if the searches are only valid for 3 months - what happens then? I wander if people just wont put their property on the market at all? And how are the folk that are desperately struggling going to afford the hips - if their mortgage is already max'd out financially?

On repossessions - is the bank going to produce the HIPS? s'pose they will have to

Am I missing something?

[HonestEA -]

• It is anticipated that a HIP will be valid for a period of one year although this has yet to be confirmed by the government. However, searches contained in the HIP are valid from the buyer’s point of view for 3 months only. Once the HIP expires, you will need to produce another Pack to carry on marketing your property.

So if the searches are only valid for 3 months - what happens then? I wander if people just wont put their property on the market at all? And how are the folk that are desperately struggling going to afford the hips - if their mortgage is already max'd out financially?

On repossessions - is the bank going to produce the HIPS? s'pose they will have to

Am I missing something?

It is true that the value of a HIP to a buyer is considerably diminished after the expiry of the searches included therin.

Once HIPS are established later in the year, it will be very interesting to see all the overpriced properties standing out like a sore thumb, since every month that goes by, more properties on say Rightmove will have HIPS linked to them, and the ones that do not have a HIP will by implication have been on the market for ages. This may lead to a market forces led take up of HIPS even from those who have "avoided" paying by marketing their homes before the respective deadlines.

Some agencies are actually having some success with the strategy of pushing the now optional Home Condition report as a means of achieving higher prices for their clients. The idea is that a seller who is prepared to commision an optional HCR as part of their HIP has nothing to hide and will gain an advantage in interest which will lead to a higher price being achieved which will more than cover the extra cost. Again this will lead to a market forces led takeup of the optional HCR element of the HIP if this idea proves successful in practise. This might be extremely viable if the current slowdown turns into a full blown buyers market. Which vendor would you trust, the one with the HCR made freely available or the one who says buyer beware?

Most large Corporate EAs will offer a "defered payment" scheme for a nominal sum extra, meaning the cost of the HIP can be taken from the sale proceeds avoiding any up front cost liability. Not sure about the smaller independent agent however, although the smarter ones are well prepared by now.

Mortgagees in Possession will have to pay for the cost of the HIP, sadly it will just be added to defaulting borrowers arrears account with interest accruing of course.

[29929BlackTuesday]

What if they pull their houses off the market?

They obviously AREN'T THAT BOTHERED ABOUT SELLING THEIR HOUSE THEN!!

In effect they're kite-flyers trying to get the max from the market if they can.

These are the scum who push up prices and if they take their piles of tatty bricks off the market all the better.

I've been looking at houses in my area and the SAME old houses have been on for 6-12 months with NO PRICE DROP! Why? 'Cos they aren't BOTHERED IF THEY SELL OR NOT.

Get these time-wasting idiots off the market and then we'll see what MOTIVATED sellers sell for now that the fake kite-pricers have boggered off.

A cat crapped on my lawn today - I'm quite angry still.

[HonestEA -]

What if they pull their houses off the market?

They obviously AREN'T THAT BOTHERED ABOUT SELLING THEIR HOUSE THEN!!

In effect they're kite-flyers trying to get the max from the market if they can.

These are the scum who push up prices and if they take their piles of tatty bricks off the market all the better.

I've been looking at houses in my area and the SAME old houses have been on for 6-12 months with NO PRICE DROP! Why? 'Cos they aren't BOTHERED IF THEY SELL OR NOT.

Get these time-wasting idiots off the market and then we'll see what MOTIVATED sellers sell for now that the fake kite-pricers have boggered off.

A cat crapped on my lawn today - I'm quite angry still.

Nope they are not. You would be surprised how much of an average EAs stock is made up of such "kite fliers" or preferential sellers. As an EA, you either walk away from these people or agree to "test the market" at the vendors optimistic price, hoping that the vendors motivation will improve if you can find them the home of their dreams when they will drop their price to a sensible level in order to sell. In a rising market you do the latter, in a falling market you do the former.

As the old saying goes, there are only 2 reasons why any property on the market does not sell, either wrong agent/bad marketing or wrong price. Any house is saleable in any market at the right price.

Edited August 21, 2007 by HonestEA

[Wario]

A cat crapped on my lawn today - I'm quite angry still.

Top Money-Saving Tip:

Duct-tape it to a stick, and presto! A super-stylish bog-brush.

[Wad]

Some agencies are actually having some success with the strategy of pushing the now optional Home Condition report as a means of achieving higher prices for their clients. The idea is that a seller who is prepared to commision an optional HCR as part of their HIP has nothing to hide and will gain an advantage in interest which will lead to a higher price being achieved which will more than cover the extra cost. Again this will lead to a market forces led takeup of the optional HCR element of the HIP if this idea proves successful in practise. This might be extremely viable if the current slowdown turns into a full blown buyers market. Which vendor would you trust, the one with the HCR made freely available or the one who says buyer beware?

I thought this might happen! HonestEA is the first person I have actually seen reporting it though and very interesting it has taken hold so quick. If I was marketing a property I would want to everything possible to ease the process for the buyer as this is likely to lead to more potential offers - and a higher price as a result.

It seems to me that a house without a HCR in a year or so might well simply mark itself out as being a house where the vendors are not really interested in selling but just kite flying. Indeed, I would have no hesitation in testing their seriousness in selling by asking for an HCR as part of the conditions of any offer I made. If anyone turned down a good offer from a cash buyer because they had to do a £600 report I would be concerned that they were not serious in their intention to sell - or perhaps that they might be hiding something.

[oracle]

What if they pull their houses off the market?

They obviously AREN'T THAT BOTHERED ABOUT SELLING THEIR HOUSE THEN!!

In effect they're kite-flyers trying to get the max from the market if they can.

These are the scum who push up prices and if they take their piles of tatty bricks off the market all the better.

I've been looking at houses in my area and the SAME old houses have been on for 6-12 months with NO PRICE DROP! Why? 'Cos they aren't BOTHERED IF THEY SELL OR NOT.

Get these time-wasting idiots off the market and then we'll see what MOTIVATED sellers sell for now that the fake kite-pricers have boggered off.

A cat crapped on my lawn today - I'm quite angry still.

This could get quite interesting!!!

....what's the point in floating the house if you have to pay £500 for the privilege?

what's the point in putting the thing on at a ridiculous price if you don't intend to shift it??

.....and what effect will all this have if the Indices suddenly turn negative??

......a nice little moneyspinner for the government when people chase the market down??.....it bears all the hallmarks of the pump-and-dump,just like the 3G licences.......cannily the spectrum was auctioned just prior to the dotcom bust.

[Sonic the Hedge Fund]

......a nice little moneyspinner for the government when people chase the market down??.....it bears all the hallmarks of the pump-and-dump,just like the 3G licences.......cannily the spectrum was auctioned just prior to the dotcom bust.

Yes

I remeber this very well, IIRC my thoughts at the time were that the 3G auctions were one of the main triggers for the dotcom bust...it all happend in very quick sucesion

the 3G auctions were a game of nerves, no operator dared not to join in in case they got left behind. Then in a mater of weeks, days even all the talk was 'They paid HOW MUCH? are they f***ing MAD? they will be ruined!'

Bit of an 'Emporer's new clothes' moment

Sound familiar?

Edited August 21, 2007 by Sonic the Hedge Fund

[ScaredEitherWay]

It is anticipated that a HIP will be valid for a period of one year although this has yet to be confirmed by the government. However, searches contained in the HIP are valid from the buyer’s point of view for 3 months only. Once the HIP expires, you will need to produce another Pack to carry on marketing your property.

So if the searches are only valid for 3 months - what happens then?

I escaped HIPs, putting my house on the market in June 2006.

I did wonder about this as when I put it up for sale I knew I was in for a long wait because many houses where I lived took years to sell. It was a very seasonal remote seaside town.

In the event, my house sold after 1 year. But I did wonder how a HIP would have affected my property's desirability over the others if I wasn't continually keeping on top of it.

[ScaredEitherWay]

or perhaps that they might be hiding something.

Yes, that they're mortgaged to the hilt and can't afford £600 up front.

[UNSHURE]

• It is anticipated that a HIP will be valid for a period of one year although this has yet to be confirmed by the government. However, searches contained in the HIP are valid from the buyer’s point of view for 3 months only. Once the HIP expires, you will need to produce another Pack to carry on marketing your property.

So if the searches are only valid for 3 months - what happens then? I wander if people just wont put their property on the market at all? And how are the folk that are desperately struggling going to afford the hips - if their mortgage is already max'd out financially?

On repossessions - is the bank going to produce the HIPS? s'pose they will have to

Am I missing something?

I think that you can get Hip replacements on the NHS. Better get your local Conservative MP to check out whether the ward is still there though.

Seriously though, I think that Estate Agents might provide the HIP and deduct it from the price when the house is sold.

[huw]

Seriously though, I think that Estate Agents might provide the HIP and deduct it from the price when the house is sold.

...which could lead to some awkwardness if the vendor changes his mind about selling (either altogether, or through that EA).

[Sonic the Hedge Fund]

...which could lead to some awkwardness if the vendor changes his mind about selling (either altogether, or through that EA).

Effectively means that vendors must be comitted to selling, regardles if they or the EA pay for the HIP

EAs will put more presure on vendors to drop prices to secure a sale, if the EA has paid for a HIP

[HonestEA -]

Effectively means that vendors must be comitted to selling, regardles if they or the EA pay for the HIP

EAs will put more presure on vendors to drop prices to secure a sale, if the EA has paid for a HIP

EAs will never pay for a HIP upfront since it would be commercial suicide for all but the top LONDON agencies where average commission fees are significantly higher than the rest of the UK. All EAs have to commission a HIP from one of several HIP provider companies that have been established for this purpose. Most will ask the client to pay upfront or account for it from the sale proceeds by way of some defered payment scheme. The principle of NO SALE NO FEE will be consigned to the history books with most EAs imposing a "Stop Gap" date into their contracts to the effect that the seller is liable for the cost of the pack after x period regardless of whether he sells, withdraws or boils his head.

More likely sellers will put more pressure on EAs to sell their houses which can only help to reward good , proactive, well run agencies at the expense of the weaker players who will go out of business under pressure of significantly lower prices and volumes.

A good agent will take his clients position into account before recommending a price reduction. If the seller has a genuine real life consequence for not selling, then you ask the client to carefully consider his opportunity cost of not selling. Set in this context, an agressive price reduction may well be the best course of action. Take 10% hit now to avoid a 20% hit later. If on the other hand you are a "kite Flyer" or preferential seller then you can afford to wait until hell freezes over to get your price, which you will nearly always do if you are prepared to wait or live long enough.

[It is different this time]

I've been looking at houses in my area and the SAME old houses have been on for 6-12 months with NO PRICE DROP! Why? 'Cos they aren't BOTHERED IF THEY SELL OR NOT.

Get these time-wasting idiots off the market and then we'll see what MOTIVATED sellers sell for now that the fake kite-pricers have boggered off.

You hit the nail on the head there and that's why VI & Kirsty are crying out to have Hips scrapped but luckily they won't have their cake & eat it anymore.

Up until now it wouldn't cost sellers a penny to market their overpriced homes and they would sit on it as long as it takes to sell or just change agents and try again after a couple months. The game is over they will have to cough the cost of Hips whether they sell it or not and they'll have to renew it with extra cost if it is not sold in certain period. No more marketing overpriced homes for months without any cost.

No wonder Kirsty is peed off

[Sonic the Hedge Fund]

The principle of NO SALE NO FEE will be consigned to the history books with most EAs imposing a "Stop Gap" date into their contracts to the effect that the seller is liable for the cost of the pack after x period regardless of whether he sells, withdraws or boils his head.

Thants what I was thinking, of course the EA has to recover their costs

If on the other hand you are a "kite Flyer" or preferential seller then you can afford to wait until hell freezes over to get your price, which you will nearly always do if you are prepared to wait or live long enough.

The oppotunity cost of 'Kite flying' is £600, perhaps insignificant in a bull market but more of an incentive if you end up paying more than once - which you will if you refuse to reprice in a stagnant market.

Edited August 21, 2007 by Sonic the Hedge Fund

[Soul Reaver]

A cat crapped on my lawn today - I'm quite angry still.

You need to get out more fella

[Soul Reaver]

It just gets better and better

Homebuyers Set to Pay Twice for HIPS

[expatowner]

A cat crapped on my lawn today - I'm quite angry still.

Put lots and lots of pepper around the place and repeat after rain.

It keeps them pesky cats away long enough to break the habit.

[meow]

I understand the view about kite flying but I think there are occasions whereby you are genuinely trying to sell not if you get the right price, but if you get the right house...

I've had a situation whereby a seller didn't seem to want to take me all that seriously (that I wanted to buy) because my property wasn't sold, but the buyers of my property wouldn't take me seriously (that I wanted to sell) because I hadn't had an offer accepted on where I wanted to move to (GAAAAH!) catch 22 eh?

Perhaps I'm just being naive here but would people consider that as speculative kite flying? The hips certainly do not help in this situation.

[29929BlackTuesday]

You need to get out more fella

S'what the wife said too. I was stomping around the house vowing to destroy all cats (metaphorically). Going to visit New Look then have a burger to get over it. Living the dream.

Back to houses - If your house is on t'market already, can you, as a FTB, ask for a HIP anyway?

[Benedict]

This could get quite interesting!!!

....what's the point in floating the house if you have to pay £500 for the privilege?

what's the point in putting the thing on at a ridiculous price if you don't intend to shift it??

.....and what effect will all this have if the Indices suddenly turn negative??

......a nice little moneyspinner for the government when people chase the market down??.....it bears all the hallmarks of the pump-and-dump,just like the 3G licences.......cannily the spectrum was auctioned just prior to the dotcom bust.

I reckon it'll lead to massive divergence between the indices - rightmove's asking price measure will tank, measures based on mortgage approvals or completed sales should hold up a bit better.