How does a quick house sale work?
If you’re looking to sell your house in 2017, you might be tempted to try a quick house sale. This type of selling process is offered by companies that will buy your house quickly and efficiently but at a much lower price than you’d find if you were to go through the traditional route of putting it on the market. Depending on your position, this solution could be ideal, but there are a number of problems that sellers could face when going through this process.
What are the advantages of using a quick house sale company?
As it stands, quick house sale companies account for between 0.5 and 1% of all house sales which translates to around £0.9 billion. Quick house sale companies will buy your home, usually with cash and at a discounted rate, either directly or through a third party company. This is perfect for homeowners that need cash in a hurry for such things as avoiding repossession or clearing debt, to quickly relocate or move for other personal reasons. More often than not, property owners that have struggled to sell their property via the traditional means of an Estate Agent seek a company that specialises in quick house sales. Such companies tend to advertise themselves as a no-hassle selling process. Other than the ability to sell your house quickly, you won't have to deal with house viewings, something that a lot of homeowners find troublesome during the selling process, particularly the elderly or those with young families. In addition, you won’t need to spend time and money redecorating your home, as many quick sale companies advertise their services to properties in any condition (within reason, of course!) Possibly the two most attractive characteristics of this type of sale are control and certainty. With a quick house sale, you alone will be in control rather than dealing with a long line of buyers, sellers, agents and solicitors and with the current state of the housing market in the UK, many people are looking for certainty when it comes to their finances. Today's stagnant housing market might mean that confirming a final sale for your home could take months.
Problems that may arise with a quick house sale
Just as with everything, there are a host of disadvantages to watch out for if you’ve decided to use this alternative method of house selling. Through the standard route of house selling, sellers are usually expected to forgo 10-25% of the price of their property, but in some cases found by the Office of Fair Trading (OFT), this reached as little as half the house's value. One of the biggest problems is that some companies may offer to buy your house for a certain price, but decrease this at the last minute after you have signed your agreement, leaving you out of pocket. This is considered property fraud. It is likely that these companies will also charge fees for their service, and these are not always made clear to the customer meaning hidden charges can hit you when you least expect. Watch out for companies that will not allow you to sell to anyone else that comes up with a better offer for your property. Again, like hidden charges, this is not always explained outright.
What to do if you’re considering a quick house sale
Before deciding to go ahead with a quick house sale, always make sure that you have considered your priorities and weighed up the potential pros and cons of the process. There are a number of things you can do before and during the sale:
· Check the credentials of the company: This may seem simple, but it is often the biggest mistake of quick sellers. Make sure that the company you are in contact with is registered with either The Property Ombudsman or Ombudsman Services: Property.
· Get everything in writing: Never accept a verbal assurance. If you need to, draw up a contract of your own for certain issues.
· Don’t commit too early: Shop around to see what different quick sale companies can give you the best offer. Avoid signing on the dotted line too soon after you've decided to sell and don't sign until you've received an offer you're happy with.
· Get an independent advisor: The company you decide to use are likely to recommend a legal representative, but you are well within your rights to find your own.
· Avoid companies that tie you to them: Some companies will make you sign an agreement that means you are tied to them for a long time, and a breach of contract could have huge financial repercussions. Normally, Estate Agent contracts last 8-12 weeks so look for something in that ballpark.
· Accurately value your property: Don’t blindly put your faith into a company for an honest valuation of your property. Although a quick house sale means you'll be selling your house at a discounted price, you should still receive a fair amount of cash in comparison to what your home is worth.
· Don’t shy from negotiations: It's never a bad thing to negotiate with price and terms, and you shouldn't feel under pressure to accept the company's first offer.
· Be honest: If you’re not 100% truthful about the conditions of your property or your financial situation, this tends to hold up the process of selling and can even lead to further reductions from the price you were initially offered.
Spotting an unreliable quick sale firm
The increase in these "we buy any home" type companies has risen in the past few years, and a number of them have tarnished the reputation of others due to malpractice. The Competitions and Marketing Authority (CMA) have identified a number of companies for wrong-doing when it comes to quick house sales. These particular companies left a number of homeowners thousands of pounds worse off. Both the CMA and the OFT have advised sellers not to follow through with a company that fails to give certain information up front such as who is buying the property and for how much, when the sale will happen, what fees and charges the seller is expected to pay and whether or not they members of the NAPB (The National Association of Property Buyers). If so, they should be signed up to a Code of Conduct that means there will be a right of redress if anything goes awry. Check the NAPB for a full list of its members.
Alternatives to using a quick sale firm
Before you make a final decision, consider options that might help you keep your home (if you don’t want to sell) or options that might be able to get you a higher price. Seeking advice for managing your financial problems can be done via the Money Advice Service. Moreover, if you’re struggling with the payments to your mortgage lender, the company that you’re with should provide as much assistance as possible to help you get on the right track with your money. They can also stop or delay repossession proceedings. Of course, you can go through the traditional route of selling through the Open Market, either with a high street Estate Agent or one online, these usually tend to offer lower rates. More and more people are choosing to sell their homes through a private sale which ensures that they avoid extra fees.
Who to contact if you have a problem with your quick house sale company
If you haven't received the service you expected from a quick house sale company, then you can first contact the company directly. This will give them a chance to deal with your complaints or worries and hopefully resolve it. If that doesn't work, contact The Property Ombudsman or Ombudsman Services: Property or you can get in touch with the Citizens Advice consumer helpline on 0345 404 0506. According to OFT, 70% of the complaints that they receive regarding quick house sales are from homeowners that are considered vulnerable, whose appeal to an apparently hassle-free service is greater than others. These include older people, who usually wish to sell their property to downgrade or to pay for care. Others are those wishing to relocate or dispose of inherited property quickly.
A spokesperson for Which?, explained that the OFT should "take firm action against quick house sale companies that have broken the law so that the consumers, particularly those who are vulnerable or in financial difficulty, can have confidence in the market", following, "Anyone thinking about this as an option should shop around and check if their provider is signed up to a code of practice or redress scheme, or is regulated by an official body." Prospective sellers should take heed of this sound advice and shouldn’t expect anything less than a first-class service no matter the route they want to take.