“Quick Sale” firms: what to watch for
If you need to sell your house in a hurry then you might be thinking of using a quick sale firm. But what are your other options? And if you want to take the quick sale route, what should you watch out for?
What are Quick Sale firms?
“Quick sale” firms 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. Sounds good if time isn’t on your side, but the Office of Fair Trading have had them in their sights because some were misleading customers and ripping them off.
What can be the downsides of going to a Quick Sale firm?
- Some companies agree to buy a house, but then reduce the price at the very last minute. Read more about property fraud practices.
- Fee structures are not always made clear to the customer. Dishonest companies can impose hidden fees and block the sale until you have paid them
- 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.
- Some companies may impose excessive penalties on those who want to leave it
Should I use a Quick Sale firm?
Not until you’ve considered all your options, which might help you to keep your home if you don’t want to sell or to sell at a better price. These include:
- Seeking advice on managing your debt problems. The Money Advice Service (moneyadviceservice.org.uk) has produced a number of free guides for people with financial problems and have a helpline which may be able to help.
- Negotiation with your mortgage lender If you are thinking of selling because you are finding it difficult to keep up payments on your mortgage, always talk to your lender first. The lender should provide as much assistance as possible and consider what options might help you given your circumstances. Lenders can also agree to stop or delay repossession proceedings.
- Selling through the open market. In most instances you will get a better deal by selling on the open market either with a traditional high street estate agent or one of the increasing number of online agents which charge much lower fees. You can also sell your home yourself through private sale.
If you do use a Quick Sale firm, 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. Find out if they are actually the buyer, or if they will simply pass your details onto another company. Check that they are a member of The National Association of Property Buyers (NAPB). Then you’ll know you have right of redress should anything go wrong.
- Negotiate. 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 advice from a solicitor.
- Read the agreement carefully. Do you understand what you’re being asked to sign and the implications? Ask your legal adviser to look over it.
- 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. Consider using a company that has no tie-in at all.
- 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.
- 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.
How do I spot a dodgy Quick Sale firm?
The OFT (now the Competitions and Markets Authority or CMA) has investigated 3 companies for wrong-doing. They recommend not using a company that fail to give you the following information up front:
- Who is buying the property?
- How will they pay?
- Is there proof that they have funds available?
- When will the sale happen?
- Who is valuing the property and how?
- What is the offer price? Will this change? If so, why?
- What fees and charges will you have to pay?
- Will you have to pay even if the sale doesn’t go ahead?
- Are they members of the NAPB? As such, they will have signed up to a Code of Conduct and there will be a right of redress if anything goes wrong. A full list of members and more information can be found at the NAPB website.
Information provided by The OFT and Jonathan Rolande of the NAPB.