HM Insights

Selling your home: what do you need to know about Home Reports?

It is now more than 10 years since Home Reports were first introduced to the Scottish property market. I remember some trepidation as to how such a momentous change would affect the market but on the whole while there is always scope for further tweaking, they have proved a positive change. We needn’t have worried! However if you have not bought or sold a property since 2009 you may not be familiar with a home report, so what does it involve?

A home report contains three documents: a survey / valuation (a general assessment of condition noting any repairs required, and an accessibility audit), an energy report, and a property questionnaire (details of council tax band, parking, alterations etc.). For convenience a mortgage valuation report is often also included. A surveyor (acting independently of the seller as they must also answer to a buyer / lender) provides the first two, the seller the third, it being a legal requirement that, save for a few rarely used exceptions, a seller must provide a home report within nine days or risk a £500 fine. Some properties do not require a report, e.g. new builds / conversions, and dilapidated properties.

Estate Agency Property and Legal Advice Scotland

Common misconceptions

One common misconception is that a report is only required if the property is being marketed through an Agent. If the property is publicly advertised, even if ‘privately’ e.g. by social media or word of mouth, a home report must be available.

Another misconception is that home reports go out of date. In truth, a seller must only ensure the report is less than 12 weeks old at the point of marketing. There is no requirement to update the report although it may be advantageous to do so where a property has been marketed for some time, or repairs are carried out. Where the confusion arises is that a lender will not accept a mortgage valuation report more than 12 weeks old. In such cases a buyer can request that the seller updates the report.

Sellers with well-maintained properties have nothing to fear from a home report, it will be a selling point. If any adverse issues are highlighted repair work may be considered, removing any negatives prior to the house being advertised.

Home reports have revolutionised the market and have proved very useful. One of the key points behind their introduction was to enable buyers to make a more informed decision as to whether to offer for a property. Prior to the introduction of home reports, multiple surveys were often required adding to a buyer’s costs, and although home reports have added to a seller’s costs, this has been more than offset by the certainty they have brought to the process of accepting an offer - any condition issues which might have derailed an offer later under the old system being out in the open at the outset.

It is worth noting that home reports should not be taken as being a full structural survey. Buyers do not have to make use of them and can instruct their own separate survey, although in practice most won't want to incur the extra cost.

The drawbacks? They can sometimes delay getting a property on the market and have added to sellers' costs which may have stopped some people ‘testing the market’ although that has to be a good thing as sellers will be more committed to selling. There are also occasions where a lender may still insist on a separate survey.

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