The recent cliff-edge panic over the latest stamp duty holiday coming to an end has seen a dramatic increase in people looking to sell their home fast.
As the rule of supply and demand dictates, wherever there’s a problem there’s going to be someone out there willing to provide a solution, but are quick house sale companies really the answer for those looking for a rapid property sale?
In today’s post, we take a look at quick house sale firms and give our thoughts on how effective, and trustworthy, they are.
Let’s get to it!
A brief overview of quick house sale companies
Their name tells you all you need to know: these companies claim to be able to sell your home faster than anyone else. How they manage to do this varies, as do their success rates.
Some of these firms will be run by developers looking to buy your property directly, while others will have a database of buyers who are waiting for homes like yours to hit the market. Sales made through quick house sale companies are almost always cash and they can be very speedy indeed.
So far, so good, right?
Unfortunately, there are more than a few cases where things haven’t gone swimmingly for homeowners who choose the quick sale route.
Are quick house sale companies a legitimate option?
As with pretty much everything, there are good and bad sides to this section of the property industry. Many quick sale firms operate with integrity and are completely transparent about how they do business.
Others, not so much.
The key thing to remember when considering taking this avenue is that in order to sell your property as fast as they promise, the firm in question needs to make the sale irresistible.
How they do this can be described in a single word: Price.
Discounted sale prices way below market value are the name of the game here. So, if you’re happy to take far less for your home than you’d expect to get if you sold via more traditional means, quick house sale companies could be a good fit. Just be aware that these firms are not created equally, so you’ll need to do your homework before you agree to anything.
Am I protected if I sell through a quick house sale firm?
Regrettably, firms who offer to sell your home fast are not regulated, which means that:
- Homeowners choosing to sell via a quick house sale company are not protected.
- Practically anyone with an Internet connection can set up a quick house sale business, which is obviously a cause for concern.
Naturally, both of the above will have you raising a suspicious eyebrow. However, while we would advise you to exercise extreme caution if you’re considering using a quick sale property company, it’s important to point out that not all of these firms are shady. Many, as we’ve already mentioned, operate both legally and ethically.
While there may not be a direct defence against unscrupulous businesses in the quick sale sector, you can sort the wheat from the chaff another way. Many legitimate operators in this part of the industry will be registered with The Property Ombudsman (TPOS), which gives unhappy sellers an opportunity to use their fully independent redress service should things go awry.
With this in mind, finding a quick house sale company that is accredited by the TPOS should be priority number one, but there are other things to consider, too.
Deciding whether or not to use a quick house sale company
There’s no question that, for some, quick house sale companies can be the best route to take. That being said, there is a definite problem with the way they market their services and the transparency across the sector as a whole.
The Office of Fair Trading conducted a study of the sector back in 2013 and found that:
‘...home sellers are not always able to make confident use of the quick house sale service. This includes sellers in vulnerable situations, such as those in financial difficulty and, sometimes, older people.’
Another part of the study revealed that the OFT had:
‘...also identified business practices that may not comply with the law and practices that fall short of the standards we would expect of businesses in this sector.’
From what we can see, not a lot has changed in the last eight years, so one should think very carefully before choosing to sell their home quickly through one of these firms. Selling fast can suit some and the guarantees made can be attractive, but these often come at a cost to the homeowner.
The key complaint from those who have trod the path before is the discrepancy between the offer price made at the outset and the price received at the point of sale. Late, and often last minute, reductions are commonplace in the quick property sale industry and they are frequently hefty.
Cuts to the offer price in the region of 30% are not unheard of and will habitually be made just before the deal is about to go through. Couple this with the fact that the initial offer could be somewhere in the region of 25% less than market value and it’s easy to see how tens of thousands of pounds can be lost in very short order.
The OFT’s concern over providers exploiting sellers’ circumstances is genuine and it’s clear that the most vulnerable are undoubtedly at a higher risk of falling foul of these practices.
What to ask a company offering to sell your home quickly
If selling your property quickly is your primary focus and you don’t mind taking a significant hit on the price you’ll receive, you should still tread carefully. By asking the company promising to sell your home fast the following questions, you will be able to get a better idea on just how legit they actually are:
- How is the property valued and will it be conducted by an independent market appraisal expert?
- Who are they accredited by? Look for either The Property Ombudsman (TPOS) or the National Association of Property Buyers (NAPB) to ensure you have some form of redress system available to you if the worst was to happen.
- How long do they expect the sale to take? Ask for averages and best and worst case scenarios. Many will advertise extremely fast sale times to get you on the hook, but the reality can be somewhat different. You can even ask them to break the process down into stages and give a rough estimate for each, if you wish.
- How are their fees structured? Will you be liable for charges should the property not sell or you decide to pull out?
- How frequently do they change the initial offer price? What causes such changes to occur? Can you change your mind if the offer isn’t agreeable without fear of being penalised? Are there conditions attached to the offer?
- Are they, the quick house sale company, going to be the ones buying the property or will they be acting as an intermediary for a third party?
- If a third party is the buyer, how does the quick house sale company vet their clients? Will there be guarantees in place over the buyer’s ability to pay and/or stick to the timeframe given?
- If the quick property sale company is the buyer, how do they intend to fund the purchase? Those offering cash should be challenged, as trustworthy companies will be able to prove they have the necessary funds available quickly and easily. Should they baulk at your request for proof, you should treat this as a huge red flag.
As traditional estate agents, we are natural competitors to the quick house sale companies, but we always try to provide readers of our blog with the facts they need to make an informed decision for themselves. Scaremongering isn’t our way.
If you are considering using a quick house sale company and have stumbled across this post first, we urge you to do further homework to validate what we have written here. Seek guidance from independent parties, such as Citizens Advice or The Money Advice Service before you sign anything.
For those looking for a more conventional sale, and based in or around Wanstead, E11, give our team of friendly experts a call to find out how we can help get you a better price within a realistic timeframe.