Quick House Sale Companies
Quick House Sale Companies have come into the news recently, appearing in a negative light. Indeed the Office of Fair Trading are investigating this to see if vulnerable consumers are being ripped off.
Generally the Office of Fair Trading (OFT) are concerned that homeowners needing ‘a quick sale’ may struggle to make informed decisions about selling their houses and as a result, receive a poor deal selling a house often below the market value – at 65% or 70% of market value.
More often than not it is a seller’s ‘circumstances’ which will dictate how much they will receive for a quick house sale. It is a well known fact that the longer you are prepared to wait for a buyer, then the more money you are likely to receive for it.
In any event many Flying Homes house sellers have received in excess of 94% of the sale price of their homes, a figure which is often far in excess of what other fast property buyers will pay for a property.
Property Auctions For a Quick Sale
Auctions are a great way for selling your property fast, but is a property sold at auction ‘below market value’, or is it ‘at market value’? Who knows! Who is there to advise a house seller whether the auction process is the right route to choose when selling a home? The auctioneer usually receives an upfront fee but also a commission based on the sale proceeds, so it is clearly in the auctioneer’s interest to sell the property on the day. Often after an auction, unsold properties are ‘sold off’ under auction conditions.
Property Sales – Find Unbiased Advice
The OFT are worried that some consumers could be tempted by a fast house sale without looking for independent advice as to what other options are open to them. So who are sellers supposed to seek advice from? Consumers have no independent body or adviser to go to to get such advice, apart from an estate agent (who is largely commission driven), or their solicitor (who invariably has been introduced by the estate agent). Everyone seems to have a vested interest. Like financial services was (and still largely is), estate agency is commission driven with the majority of fees/commission paid when a property is sold.
House Sales – Driven by Commission?
In respect of house sales, sellers are expected to pay a ‘commission’ rather than up-front fees to get recommendations as to the best deal. This practice encourages estate agents to overvalue properties just to get the listing, then the practice of ‘progressively reducing’ kicks in until a price is reached at which a buyer is found.
Do Quick House Sale Companies Mislead?
The OFT say that they have received or are aware of allegations that some companies offering a quick house sale may on occasion:-
- mislead, by estimating the market value of a property as being lower than it actually is, therefore manipulating the discount offered.
Flying Homes can introduce buyers who will offer a price for your home which will be near the market value for a quick sale, i.e. within a few weeks. However, a different market value will apply if you can wait longer to get a buyer who is prepared to pay more.
- Falsely claim that they are cash buyers when really they are agents or intermediaries who benefit form a sale via a fee or commission.
Many companies will claim to be ‘cash buyers’, true, but the reality of the situation is not whether they have cash or a loan, what matters is how quickly they can complete the sale, and often a good solicitor can help to facilitate a quick sale whether the buyer is using cash or a mortgage.
- tie customers into exclusive contracts which have termination charges.
True, many companies will do this, but then again, probably the majority of estate agents have at least a six month agency agreement, so what is the difference? There is no point tarring everyone with the same brush, there are good and bad ‘quick house sale’ companies operating in the marketplace.
- reduce the amount offered near to when the contract is due to be finalised.
Agreed, this is wholly unfair and not good business practice, with many people in this position having committed to moving house. But even with an estate agent, this sharp practice can happen. In fact anyone, anytime in England can withdraw or reduce an offer at the last minute. Only in Scotland is the law different, whereby once an offer is made and accepted, then there is a binding contract and the seller and buyer cannot pull out (more information on the process in Scotland in Wikipedia). Therefore maybe the OFT should be recommending a change in the law?
OFT Quick Sale Housing Market Study
The OFT state that the objective of the market study is for them to gain a better understanding of how the market functions and to consider if changes need to be made to benefit consumers.
It’s clear that something needs to be done to protect consumers. Here at Flying Homes, we guarantee to treat customers fairly. Call now for a chat in confidence, 0800 68 99 420 or fill in the online quote form and let’s see if we can get you a quick house sale at the price you want.
Some interesting comments here. Reading between the lines it looks like the OFT are going to shut down some operators who con their clients.