Inspiration

Understanding the HIPs Opportunity

How to use HIPs to gain profitable instructions

The introduction of HIPs prompted much anger and some pettiness in estate agency and whilst most would acknowledge that the government’s handling of the affair has been amateur and ineffective, most estate agents nevertheless just got on with the job and incorporated HIPs into their service. However, in doing so, they have also missed certain opportunities.

Firstly, let’s remember that the primary purpose of a HIP is to inform the buyer that the property is actually what he/she expects it to be, before committing to it. This makes our own job easier as we increase the chances of a fast, successful conclusion to the sale. Of course, we are all aware of the practical and emotional difficulties caused by the withdrawal of first day marketing and I would urge anyone to sign the petition for the government to reinstate this (see http://petitions.number10.gov.uk/restorefdm/). But why are agents not using this petition as a local PR initiative? Imagine asking the public to support this - you’d instantly find out who is thinking of selling!

If there were no problems in the sale of residential property then there would be no need for estate agents! But it is our commercial responsibility to harness some of these if we are to take fullest advantage of our role.

For example, the most obvious omission in a HIP is a Home Condition Report. The condition of the property is surely one most likely to cause delay and renegotiation. Not to have an HCR with a HIP, in my opinion, renders the HIP virtually impotent. Most buyers are not bothered about the energy efficiency rating of the property, but they are interested in whether it needs a new roof, damp or timber treatment.

So why have most agents not harnessed the opportunity to secure instructions by explaining the benefits of an HCR to the prospective seller, and ideally offering them free with a HIP. Your competitors are not doing this. The reason is no doubt the very English issue of “liability” and there is also cost to consider. Both of these can be avoided as I discovered when I provided my own clients with a type of HIP and HCR twenty years ago – and enjoyed an 80% conversion ratio as a result.

This is how it works. Ask a Home Inspector to provide you with an HCR, without initial charge and ensure that nobody’s name appears on the report. In other words, as no money has been paid, and the report belongs to nobody, there is no liability to anyone. The document is available for any prospective buyer to consider, and it should ideally be included with the property details. Only when a buyer is found are they invited to accept ownership of the document, pay the Home Inspector for it, and a liability between the HI and Client (the buyer) is established. The HI gets loads of business due to the initial “free offer” and you get more instructions – virtually exchange-ready and ideally at a higher fee!

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© Richard Rawlings 2012
Richard Rawlings is the founding director of Estate Agency Insight, which specialises in helping estate agencies harness opportunity through innovative method, marketing, publicity, and training. He can be contacted at or on 0845 838 1354.

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