Selling to a cash house buyer? Learn how they work
There is little regulation in the quick house sale market, and whereas we believe most operators will not take advantage of vulnerable customers, some will and face little recourse.
Selling your house fast to a quick sale firm means accepting less than what it’s worth. Usually, you’ll receive anything between 70% and 85% of the value of your home in return for a fast, hassle-free sale in just a few weeks.
A quick sale firm has cash or finance in place to purchase without the usual time delays associated with arranging finance. They make a profit by buying your home at a discount then selling it for more on the open market.
House sellers usually embark upon an eight-step process when selling their homes to a quick sale firm.
1. The advertising message
The advertising messages are varied and include:
- Sell your house fast,
- We buy any house,
- Quick house sale,
- Get an offer,
- Sell in seven days.
The advertising message appears in newspapers, television, online advertising, or on websites found using search keywords. The quick sale firms’ call to action promises are all more or less the same, promising a quick sale in a few days in return for a reduced price.
2. First contact
Once a homeowner arrives at a quick sale firm’s website, they are presented with a web form to complete to get a cash offer quote to sell their home fast. The form on the website usually asks for the following details:
- Telephone number
- Email address
- Property details
- Selling timescale
Sometimes the quick sale firm offers web chat and a telephone number as additional ways to contact. Whatever the method, the property buyer needs the basic information above to offer to buy your home.
3. Managing your expectations
The quick sale firm needs to manage homeowners’ expectations, offering a reduced price, which may be a shock. The value of the service needs explaining, quick sale, hassle-free, no need to do any repairs etc.
Once the homeowner is comfortable with how the discounted price reduction works and the timescales involved and agrees in principle to sell their home, the property buying company explains its process in more detail.
4. The desktop valuation
The quick sale firm usually conducts two valuations. The first is by using an online valuation calculator and then comparing the prices for sale, and those sold similar to the homeowners’ property. The valuation at this stage is the one used for the initial offer in principle.
5. The provisional offer
It may surprise you to learn that the initial offer is just that, an offer to get you interested and hooked in. The quick sale firm’s staff have an opportunity to build a rapport with you, much like any other salesman selling any other type of product or service. The offer is usually a percentage of the desktop valuation figure, maybe 70-85%. BUT this percentage only makes sense if the valuation is reasonable.
6. The formal valuation
Next, assuming the homeowner is happy to proceed with the sale, the quick sale firm may instruct a more formal independent survey at their cost. The second survey is to check the property condition and anything that may impact its value, such as structural issues. Remember, it’s at this stage the provisional offer will be firmed up and adjusted.
It is often the case that whoever pays the piper gets to call the tune. In other words, the lower the valuation, the better it is for the property buying company who have probably made a big deal about just how much they’ll pay.
For example, if your home is worth £150,000 and the property buyer promises you 85% of its value, and you’re happy with that, you’d expect to receive £127,500, a cost to you of £22,500 for a quick sale. However, if the formal valuation is £135,000, then 85% of that figure means you receive just £114,750! If the property buying company sells your home for £150,000, then you’ve received just 76.5%.
The above example is why it is essential to understand the valuation process and sell your home to a cash house buyer with your eyes wide open.
7. Solicitors instructed
If all parties are happy, then conveyancers are required to finalise the purchase with the homeowner’s solicitor, sticking to their original promise in the timeframe agreed. The quick sale firm may pay for or contribute to the homeowner’s legal fees,
8. Completion and moving out date
Finally, the quick sale firm agrees to a convenient date for the homeowner to vacate the property and a completion date to send the purchase price monies. The date isn’t always set in stone as often last-minute delays arise, but the date should not change as the quick sale firm has the money available, and the process is routine for them.