Quick house sales
If you need to sell your house fast you might be thinking of using a ‘quick sale’ company. They offer to buy your house in as little as a week at a discounted price. However, there are concerns that home owners could be misled and lose out financially. Read on to make sure you know what you’re doing.
What are quick house sale companies?
Quick house sale companies offer to either buy your house or find you a third party buyer very quickly, and pay cash for your property, usually at a discount from the full market value.
Pros and cons of using a quick house sale company
They can provide a useful service for homeowners who need to unlock cash in a hurry. For example to:
- avoid repossession, clear debts or sort out financial problem
- dispose of inherited property
- move for age or health related reasons
- sell as a result of divorce or relationship breakdown
- relocate due to a change of job or to emigrate
- try a different route if unable to sell through a traditional estate agent – get around issues that have made a property hard to sell, for example with a short lease or if a property has a high risk of flooding
Beware unscrupulous traders
One vendor signed a deal with a quick house sale company agreeing a purchase price of £75,000, but the day before the removal men were due to arrive, the company lowered the offer to £40,000.
Source: BBC, 2012
- some companies agree to buy a house, but then reduce the price at the very last minute
- fee structures are not always made clear to the customer
- some companies make false property valuations
- some contracts tie customers in, preventing them from selling to anyone else who might come along with a better offer
Is using a quick house sale company right for you?
To answer this question, you need to think about why you’re selling and what your priorities are.
If selling your property quickly is more important than getting the best price, then you might decide that using one of these companies is worth it. However, be prepared to end up with about 75% of your property’s value.
Before deciding to go ahead, make sure you’ve considered all the alternatives and read our top tips (see below).
Alternatives to a quick house sale
Use a traditional estate agent
Before deciding whether to go ahead with a quick sale company, ask some local estate agents what price would get you a quick sale.
You might find that the amount you need to drop the price by is less than the typical 25% discount that a quick sale company would ask for.
Negotiate with your mortgage company
If the reason you’re selling up is that you’re struggling to keep up with your mortgage payments you should contact your lender to discuss your options. Mortgage companies have to consider a request to change the way you pay your mortgage.
One of the things they might suggest is extending the term of your mortgage (the amount of time left to run on the mortgage) to reduce your monthly repayments.
Look at other ways of funding your long-term care
If the reason you’re selling your home is to pay for your long-term care, make sure you’ve looked into all the alternatives and have spoken to an independent financial adviser who specialises in funding long-term care.
Top tips if you’re going ahead with a quick house sale
If you decide that you would like to sell your property through a quick house sale company follow these tips:
- Do your own valuation. Make sure you get a valuation from three different estate agents so you can decide whether any offer made by a quick sale company is fair.
- Shop around. Not all quick sale companies are the same. Make sure you look at what different ones can offer.
- Check the company’s credentials. If the provider is a broker (someone who introduces you to a prospective buyer), check that they are registered with either The Property Ombudsman or Ombudsman Services: Property. If the provider says they have signed up to a code of practice, or they are regulated by an official body, check for yourself.
- Don’t be shy. It’s always worth negotiating the terms and/or the price.
- Get everything in writing. Don’t accept verbal assurances.
- Take your time. Don’t rush or be pressured into a decision.
- Get your own independent legal adviser. The company you’re using can’t force you to use the legal representative they recommend. See below for where to find a solicitor.
- Read the agreement carefully. Don’t sign an agreement unless you fully understand what you are agreeing to. Get your legal adviser to explain anything you’re not clear about.
- Avoid long tie-ins. Don’t sign any agreement that ties you to the quick sale company for a long time. A typical estate agency contract lasts 8-12 weeks. A quick sale contract should be shorter than that.
- Be honest. Giving incorrect information or leaving important things out might cause hold-ups further down the line and even mean a reduction in the price you’re offered.
- Ask to see the survey. If the company you’re using reduces the offer price, ask why. If the survey’s findings are to blame, ask to see them. A fair-dealing business will not hide them from you.
- Don’t commit too early in the process. Don’t sign on the dotted line until all the surveys and legal checks are done and you have a final offer in writing.
Finding a solicitor
- England and Wales – find a solicitor on the Law Society website
- Scotland – find a solicitor on the Law Society of Scotland website
- Northern Ireland – find a solicitor on the Law Society of Northern Ireland website
Questions to ask your agent
At each stage of the process, make sure you have all the information you need and you understand everything. Here are some questions to ask the quick sale company.
- Is the company buying your property themselves or is someone else buying it?
- If they are buying it, how will they pay for it? If the company says it has funds available immediately, ask for proof. A genuine cash buyer will be able to provide it.
- If someone else is the buyer, who are they and what guarantees can they give in terms of how quickly the sale can happen and whether the buyer has funds available?
- What are the timescales for the sale? What are the different stages and when will each happen? What might cause timescales to slip?
- Who is valuing the property and how?
- What might cause the offer price to change and when would this happen? Is the offer conditional, for example is it ‘subject to survey and contract’ or anything else?
- What fees and charges will you have to pay (for example surveys and lawyers’ fees)? What are the fees and charges if you don’t complete the sale?
Got a problem with your quick house sale company?
If you’re not satisfied with the service provided by a quick house sale company, tell them and give them a chance to investigate and resolve your complaint.
If you’re not happy with the way your complaint is dealt with, you can refer the matter to:
- The Property Ombudsman or Ombudsman Services: Property (but only if the company you’ve been using has been brokering your sale)
- Citizens Advice – call the Citizens Advice consumer helpline on 0345 404 0506.
- Trading Standards