the new rics homebuyer report 3rd edition

The New RICS HomeBuyer Report3rd Edition

Barry Hall FRICS MCIArb

Chairman of the RICS Residential Survey &

Valuation Working Group

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The New RICS HomeBuyer ReportChanging from the HSV

¨ Read the technical advice (the new Practice Note)

¨ Understand the structure of the new report

¨ Learn how to apply condition ratings

¨ Review how to express yourself in the report

¨ Decide how you will produce your reports (Quest, Survey Writer, PDF)

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The New RICS HomeBuyer ReportHints and help

¨ The timetable for change

¨ The headings and sections

¨ The main changes

¨ Using condition ratings

¨ Where does objectivity stop?

¨ What advice should be included?

¨ Dealing with Section J – Risks

¨ Services

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THE HOMEBUYER REPORT The timetable for change

• New RICS HomeBuyerReport (HBR) PDF versionintroduced July 2009.

• Survey Writer on-line version October 2009.

• Home Buyer Survey andValuation (HSV) to bewithdrawn 31 March 2010

• Scotland – edition due laterthis year to cover theirrequirements

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THE HOMEBUYER REPORT The headings and sections

• Contents listed A to L and sections highlighted on each page (there are more headings):– A Introduction to the Report – B About the Inspection– C Summary of Condition Ratings– D About the property– E Outside the property– F Inside the property– G Services

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THE HOMEBUYER REPORT The headings and sections

• Contents listed A to L and sections highlighted on each page

– H Grounds (including shared areas for flats)

– I Issues for Legal Advisers

– J Risks

– K Valuation

– L Surveyor’s Declaration

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THE HOMEBUYER REPORT The main changes

• The report is ‘elemental’

– Longer with more headings

– Allows for the elements to be ‘condition rated’

– Promotes objective reporting

– Limits jargon and verbose reporting

– It ‘sign posts’ the client to what needs attention

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• Uses ‘condition ratings’

– Sections E to G (and part of H) only

– Uses colour to draw the client’s attention to what matters

– Allow defects to be ordered in importance

– Useful for applying “standard paragraphs” to speed up reporting

– The application can be tied to specific rules

– Encourages a degree of consistency in reporting

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• Introduces new headings/material– The Recorded Energy Performance is stated (but not

commented upon) at D– Services are listed in a ‘tick box’ and other energy sources

can be listed (D)– Windows (E5) and outside doors (E6) are reported separately– Conservatories & porches have a separate heading (E7)– Bathroom fittings have their own heading (F8)– Water heating is reported separately (G5)– Garages are reported & condition rated (H1)– Movement , timber, defects and dampness reported under

Risks (J)

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THE HOMEBUYER REPORT What has not changed

• It remains a Survey & Valuation

– The HomeBuyer is still a survey and not just a ‘condition report’

– Additional advice can be added after the rating

– It has a Summary and Overall Opinion to balance the objective reporting (C)

– There is a Valuation (K) so it will be subject to regulation and valuer registration

– It is still a licensed product for RICS members only

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THE HOMEBUYER REPORT What has not changed

• It remains a Survey & Valuation

– There is still a dedicated Practice Note for guidance

– The Leasehold Property Advice Appendix is much the same

– Choosing between Surveys documentation remains

– Description of the RICS HomeBuyer Service is similar

– There are still Standard Terms of Engagement

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THE HOMEBUYER REPORT Applying the Condition Ratings

• The condition ratings

No repair is currently needed. The property must be maintained in the normal way.

Defects that need repairing or replacing but are not considered to be either serious or urgent. The property must be maintained in the normal way.

Defects which are serious and/or need to be repaired, replaced or investigated urgently.

NI Not inspected

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1

2

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THE HOMEBUYER REPORT Applying the condition ratings

Step One – ASK:

Is the element defective ? YES/NO

Remember that normal maintenance is to be anticipated and is not to be considered as a repair

If NO then Condition Rating 1 applies.

No repair is currently needed. The property

must be maintained in the normal way .

If YES then move to Step two.

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THE HOMEBUYER REPORT Applying the Condition ratings

Step Two – ASK:

a series of questions, does the defect:Spoil the function of the element? Yes NoCause failure in other parts of the property ? Yes No

Affect structural integrity ? Yes No

Cause a safety hazard ? Yes No

Require ‘urgent’ repair or replacement ? Yes NoNeed further investigation ? Yes No

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THE HOMEBUYER REPORT Applying the Condition ratings

Step two ASK a series of questions, does the defect:Spoil the function of the element ? No

Cause failure in other parts of the property ? No

Affect structural integrity ? No

Cause a safety hazard ? No

Require ‘urgent’ repair or replacement ? No

Need further investigation ? No

If the answer to all is NO then Condition Rating 2 applies

Defects that need repairing or replacing but are not considered to be either serious or urgent. The property must be maintained in the normal way.

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2


Step two ASK a series of questions, does the defect:Spoil the function of the element ? Yes

Cause failure in other parts of the property ? Yes

Affect structural integrity of the property ? Yes

Cause a safety hazard ? Yes

Require ‘urgent’ repair or replacement ? Yes

Need further investigation ? Yes

If the answer to one or more is YES then it is likely that Condition Rating 3 applies

These are defects which are either serious and/or

need to be repaired, replaced or investigated urgently.

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3


Brought forward to the summary

and colour coded as “traffic lights”

• Worst Condition ratings first


• Best Condition ratings last


• Dealing with multiple elements

- Different roof coverings, or several chimney stacks of varying construction/condition

- Worst rating ONLY is given priority and brought forward to the summary

- the additional elements are give a rating in the text only

eg. “The rear kitchen chimney stack is of brick, with a clay chimney pot, and has been recently re-built (Condition Rating 1).”


• Not Inspected NI

This is used if it is not possible to inspect that part of the property which is normally inspected.

• Remember that you may be able to reach a conclusion over the condition from what you can see. Alternatively, you may consider it necessary to recommend a ‘further investigation’.

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The HomeBuyer ReportReport writing software

Software producers will market a variety of report writing packages:However, surveyors will always be able to produce the reports using their own text and phrases without the use of specialist software:In these cases:– The surveyor should use non-technical terms

throughout wherever possible;– Where technical terms are used, they should be

restricted to those in the house diagram that will be included in the HBR pack.

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The HomeBuyer ReportWriting your own text

If you are not using a software package, the text in the comment boxes should be structured as follows:

– An objective, descriptive section. This will form the basis of the text used in the ‘Property Report’ that will be developed later in the year, and;

– An advisory section. This is the ‘added value’ of the HBR and provides the customer with advice on how to resolve the defects and deficiencies in broad terms.

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The HomeBuyer ReportThe descriptive section

• Several different parts:Describe the construction and location of the element;Describe the problem in broad terms that includes:– The actual part that has something wrong with it (the

slates, the flat roof covering, the brickwork, etc);– What is wrong with it (broken, leaking, missing,

rotten, etc); – The condition rating category you have chosen.

The paragraph produced will form the basis of the forthcoming ‘Property Report’.

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The HomeBuyer ReportWriting the Condition Rating

• Describe the element and its construction

• Describe its condition

• Apply the Condition Rating

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The HomeBuyer reportWriting the advisory section

This part provides the customer advice on what should be done about the identified problems:

It is still an 'economical' and 'cost effective' product so the section should be as short as possible;

However, this part provides the ‘added value’ of the HBR and so it must offer useful information;

This is where ‘objectivity’ ends

The following guidance may be helpful.

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The HomeBuyer ReportThe advisory section – the guidance

This should put the customer in the right ‘ball-park’ and highlight other factors that may affect the solution:– It must stop well short of a specification but sketch out the

extent of the work that needs to be undertaken;– Include other factors that will help the client understand the

full extent of the work that will be required to solve the problem. For example:

• The impact of listed building status and the use of traditional building techniques;

• The need to obtain a party wall and other legal agreements;

• The general cost implications of factors like access equipment for working at height, implications of possible asbestos content, etc.

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The HomeBuyer ReportIdentifying Risks & Hazards

The template I have provided will help in considering identified hazards:Consider•Do you judge it a potential safety hazard?Then•If so, is it a direct threat to the user of the property?Finally•Does it impact on the condition of the element or not ?•If it DOES then it will affect your decision on rating the condition of the element

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The HomeBuyer ReportIdentifying Risks & Hazards

• Where should it be reported in Section J (if at all)?

- As a risk to the building ?J1

- As a risk to the ground ? J2

- As a risk to people? J3

- As an other risk? J4

• Is there an impact on Market Value?

- If so then this should be reported at K

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The HomeBuyer ReportDealing with services

• Electricity G1- Advice & a safety warning written into the hard text- If there is no recent report then I suggest you apply

CR3 and also report at J 3• Gas/Oil G2

- Advice & a safety warning written into the hard text- If there is no recent report then i suggest you apply

CR3 and also report at J3• Remember

Services are not tested, but visual defects are reported

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The HomeBuyer ReportWhat is available to help you?

• The new Practice Note

- can be downloaded free

• iSurv updated

- a dedicated section to

the HomeBuyer

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• RICS Survey Writer

- accessed on-line

- pay as you go

- manage job files

- record inspection data

- produce draft reports

- deliver to clients securely

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The RICS Survey Writer• Provides the complete

collection of standard phrases used in the Survey Writer software;

• Over 1000 phrases written especially for the HBR has been edited by Tom Littler, who has many years of experience of producing home buyer reports.


• The Surveyors Guide to the HomeBuyer Report

- RICS Books

- written by Phil Parnham

- case studies

- illustrated case studies

- sample site notes

- sample report

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The Surveyor’s guide to the new RICS HomeBuyer Report

• To be published in October by RICS Books;

• It provides a practical application of the Practice Notes;

• Provides a clear focus on condition rating and report writing;

• Includes many illustrated case studies;

• Appendices include three different types of site notes and a completed sample report


• HSV 2005 scheme ends31 March 2010

• Current licence transferableto HBR scheme

• Scheme includes HBR form, Description of service (T&C), Leasehold appendix, Choosing between Surveys

• Free PDF template

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The New RICS HomeBuyer Report3rd Edition

Thank you for listening...................any questions?

Barry Hall FRICS MCIArb

Chairman of the RICS Residential Survey &

Valuation Working Group

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the new rics homebuyer report 3rd edition

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