The Law Society is urging home-sellers to check the real cost of their Home Information Pack (HIP) with their estate agent to avoid inflated costs. The warning comes after a Channel 4 News investigation found evidence that more than £100 could be added to the price of HIPs because of secret payments to estate agents.
Law Society president Paul Marsh said: “The cost of the HIP charged to the home-seller by the estate agent could be much higher than necessary and more than the agent actually pays the HIP provider. Because of these hidden referral fees the estate agent is overcharging the seller and making a secret profit.“Sellers should ask for details of the exact costs, to discover if the agent is charging them more than they should be, and more than the HIP actually cost the estate agent. They should also ask if the estate agent is receiving a hidden commission from the HIP provider, which would mean the estate agents are keeping part of the cost themselves.
“If the agent is paying £300 to the HIP provider and then charging their client £400, the client is paying an extra £100 unnecessarily. With the other costs involved in selling, these added costs are unwanted extras.
“If sellers do find their agent is charging extra for their HIP they should ask their solicitor if they provide a HIP instead, as solicitors are required to be fully open with their clients about fees. The added benefit of using a solicitor is that they are all strictly regulated and required to follow stringent rules, unlike estate agents.”
Since 6 April this year anyone hoping to sell their home requires a HIP in place before they can put the property on the market, raising the risk of quickly arranged HIPs that are inaccurate.
The Law Society has also raised concerns over the new property information questionnaires (PIQs), which are now a feature of HIPs, requiring sellers to complete a questionnaire about their home.
Said Paul Marsh: “PIQs are supposed to provide information for potential buyers about the property; but if they are not completed correctly it could harm the relationship between buyer and seller, which is the last outcome anyone wants, especially now when the market is so slow.
“A solicitor will be able to assist in completing the questionnaire to ensure it is accurate.”