Growing in presence since the start of the century, the ‘sell house fast’ industry has slowly established itself as a legitimate way for people to dispose of their properties.
Yet, by and large, the general public still has a negative perception of most of the firms operating in the space. Some go as far to dismiss us as ‘money-grabbers’ who capitalise on homeowners’ distressed situations.
This largely stems from some of the real, albeit infrequent, horror stories…
For instance, homeowners have been forced to accept rock bottom prices when their backs are against the wall. Other firms dupe sellers into believing their property is worth less than it is, and then slap on a further discount – usually just before exchange of contracts. It’s also been known for unscrupulous operators to offer sell and rent back, despite this type of transaction being heavily regulated by the Financial Conduct Authority (FCA).
Do Quick Sale Companies Really Rip Off Homeowners?
With some exceptions for properties with development potential, offers made by fast house sale companies typically lie between 80% and 75% of the market value.
At first sight, this would seem like a hefty chunk of equity for any buyer to lose. However, whilst some observers may be unwilling to alter their opinion, it’s worth taking note of the following:
Perhaps most importantly, no respectable company in our industry should be forcing vendors into selling when there are clearly other options available. We spend a lot of our client facing time running through these alternatives – most commonly, explaining that a simple adjustment to the asking price with the estate agent would usually get the house sold. Other times, swapping agents, changing mortgage terms or renting out the property are feasible solutions worth exploring;
Our sales are guaranteed and can be completed within as little as 7 days, with exchange of contracts in 24 hours where necessary;
Once people find out a little more about what we do, they often see us as the ‘we buy any car’ for homes. The properties we take on often require full ‘back to brick’ refurbishment including rewiring, gas central heating, major roof repairs etc. – all of which isn’t cheap. We’re seldom put off by houses with physical issues ranging from serious damp through to subsidence and Japanese Knotweed. Legal issues like restrictive covenants, negative easements and other third-party consents will also not deter us from moving forward with the sale. Purchasing at a discounted level is the only way to factor in the remedial costs to bring properties to a decent, habitable standard. Doing things any other way would not make business sense;
Related to the above, companies like ours are active buyers of tenanted properties – even if there are ongoing problems like rental voids, arrears and damage;
Genuine cash buying companies do not depend on external finance like mortgages. This ultimately means that much of the drawn-out bureaucracy that comes when buying and selling a house is eliminated;
Most professional quick sale companies will cover the vendor’s legal costs and, as the sale is private, there are no estate agency fees;
Sellers are guaranteed full privacy with the sale with no ‘for sale’ boards, countless viewings, timewasting etc.;
Vendors typically deal with the fast house buyer directly – meaning that there are no mixed messages and all parties involved know exactly where each other stands throughout the process;
When homeowners are facing the possibility of repossession, we’re able to intervene in the process and buy the property rather than allow it to revert to the mortgage lender only to be ‘fire sold’ for a discount anyway. In such situations, using a firm like ours enables people to move on with less hassle whilst keeping their credit rating reasonably intact;
A faster sale invariably means that there are real savings on homeownership ‘overheads’ such as mortgage costs, debt repayments and household bills. After factoring in these costs, not to mention the disparity between asking and sale prices, the difference when comparing an open market sale with ours is not as substantial as many think;
Under market value sales occur frequently at auctions and estate agencies across the country. It seems unfair to single out sell house fast companies when most investors, professional property buyers and developers sing from the same hymn sheet.
What Do We Need to Do Better?
The quick house sale industry, like most property sectors, is profit driven – yet this should not be at the expense of unashamedly fleecing homeowners.
These days, the Office of Fair Trading (OFT) takes a more proactive role in looking out for unscrupulous practices and, although it’s relatively simple to set up a company and offer such a service, the tide is changing.
Sell house fast providers are now monitored more closely than ever before – particularly in terms of our compliance to e-commerce, consumer protection and money laundering regulations as well as the relevant advertising codes and laws like the Data Protection Act.
This means that we must conduct valuations in a fair manner, be realistic about the timescales to complete on the sale, clarify the source of any purchase funds, not place any pressure and operate transparently. Also, at no point during the transaction, should the vendor be bound by any type of financial ‘lock in’.
Although many companies in the space have joined bodies like the Property Ombudsman, at Property Solvers we’ve as developed our own code of practice to which clients can hold us accountable.
Educating the marketplace about how we operate may not convince everyone – but we feel it’s our clients that can ultimately decide how they feel about us. Besides this, most reputable companies are in it for the long term and it makes little sense to attract bad press and negative social media attention.
Property Solvers is a leading quick house buying company and express estate agency registered at a number of bodies including the Property Ombudsman (TPOS), National Association of Property Buyers (NAPB) and Anti-Money Laundering Regulations.