A number of companies are offering free HIPs to homeowners, however just as you shouldnt judge your insurance premiums on cost alone, beware estate agents looking to tie you to them only to hit you with hefty agency fees later down the line.
The PPSA has urged Brits to really dig deep within the small print before agreeing to a deal which will supposedly save them money.
Normally agency fees are in the region of 1-2 per cent, however the cost of the free HIP has to be factored in somewhere and usually this will mean that youre going to be paying 0.25-0.5 per cent more in this area to compensate. This might not seem like much extra, but considering the cost of a HIP has been pinned between £300-£500, if youre paying an extra £600-£700 in agency fees then your free HIP is actually one of the most expensive.
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Another issue could be the penalty clauses written within your contract. If you are signing up to a free HIP then the likelihood is that you will remain with that agent until you sell your house, instead of giving it a couple of months and then going elsewhere. In this case doing so would possibly incur a penalty, either to the value of the HIP or for a higher value, meaning the seller loses out.
Sellers also need to ascertain whether they are locked into a restrictive contract that ties them to one agent for an unreasonable length of time, or what happens if you they sell privately or via another agent. There is also the issue of whether the seller will have to pay the original agent a fee, even if they were not the ones to sell your home.
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The final issue is whether the HIP is portable and if the seller chooses to switch to another agent or sell privately, can they take the HIP with them, or will they be liable for both a fee and to fork out for a new HIP with the new agent.
PPSA members can provide sellers with their own portable HIP that can be used regardless of whether they sell privately or via an estate agent, with no restrictive clauses about how to sell their property.
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