Quick house sale firms: What to beware of

Quick house sale firms offer to either buy your house or find you a third party buyer very quickly, usually selling your home at a lower price than you would get if you sold yourself on the open market. While quick sale companies might seem like a good option if you need to sell quickly, they are unregulated so you’ll need to do your research and tread carefully.

Angela Kerr Director, Editor

If you need to sell your house in a hurry, using a quick house sale firm may seem appealing. The idea is you can shift your house quickly for an agreed price. But in reality it’s not always that simple.

The market is unregulated and we’ve heard of many cases of consumers who feel they’ve been ripped off by quick house sale firms. So if you are considering this route we explain the best way to do it, pitfalls to watch out for and what the alternatives to quick house sale firms may be.

What are quick house sale companies?

When you sell your house via an estate agent it can take several months or longer for the sale to go through and there is always the risk it could fall down before you exchange contracts. But when you use a quick house sale company, as the name suggests, it should be much faster. The firm will either buy your house itself or find a third party buyer. You’ll be paid in cash, but the amount you receive will be at a discount from the full market value. Although you won’t have to pay estate agent fees and companies that buy houses for cash will often cover costs such as survey costs.

You may want a quick property sale to:

• avoid repossession or clear debts
• sell an inherited property
• move because of age or health related reasons
• sell up due to divorce or relationship breakdown
• relocate because of a change of job or to emigrate
• sell your home if you’ve been unable to sell via an estate agent because the property has issues making it hard to sell, for example if you are selling a property with a short lease.

Quick sale property firm pitfalls to watch out for

However, there are lots of major issues with quick house sale companies that we’ve heard of. These include:

• Some companies may agree to buy a house for a certain price, then reduce the price at the last minute.
• 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 contracts tie customers in, preventing them from selling to anyone else who might come along with a better offer
• Companies may impose excessive penalties on those who want to leave it
• Some consumers have complained their ‘quick’ sale has taken many months to complete

How much below market value do house buying companies offer?

If you’re considering using one of these firms you’ll want to know how much below market value do house buying companies offer. This varies by company, it’s often around 75%-80% of market value although in some cases it’s up to 85% of market value. But don’t get hooked in on this figure alone. There are many cases of quick sale property firms making high offers, only to change the amount they’ll pay you at the last minute – so read on to find out more on how to avoid this.

What protection do I have if I’m selling my home to a quick house sale firm?

You aren’t protected when selling a property to one of these firms as the quick house sale market isn’t regulated. However, some companies join the The National Association of Property Buyers (NAPB), which ensures its members register with The Property Ombudsman (TPOS) and follow its Code of Conduct to treat sellers fairly. And if you use a company that’s signed up to the NAPB or TPOS you can go to the ombudsman and get compensation if it finds the company has broken the TPOS Code of Practice.

Although redress is limited: if the Ombudsman supports a complaint, it can make an award of compensation up to £25,000. However the average award relating to sales in 2021 was just £580.

Step by step guide to using a quick house sale firm

If you’ve considered your other options and decided on using one of the companies that buy houses in the UK for cash, there are some steps you should take to protect yourself and reduce the risk of being ripped off.

1. Do your own valuation. Make sure you get a valuation from three different local estate agents so you can decide whether any offer made by a quick sale company is fair.

2. Shop around. Not all quick sale companies are the same. Some quick sale firms give lots of up front details on their websites such as the percentage of sale price they’ll typically offer. While others give scant detail. But don’t just check firms’ own websites – check previous customers reviews online.

But bear in mind some reviews may be fake so check a number of sources and pay close attention to poor reviews to see what people have complained about. Also 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.

3. Check the company’s credentials. Find out if they are actually the buyer, or if they will simply pass your details onto another company. One common complaint about quick house sales firms is they’re not always quick and in some cases can take several months. So if another company is involved you may find delays are more likely.

4. Negotiate. Don’t just accept the price and terms you’re offered – try to negotiate. If you’ve had estate agent valuations you’ll have a clearer idea of how much your property is worth, so you’ll be in a better position to negotiate. And you can also use our free tool to get an instant home valuation too.

5. Get everything in writing. Don’t accept verbal assurances – make sure you get everything about the sale of your home in writing.

6. Take your time. Don’t rush or be pressured into a decision.

7. Get your own independent legal advice from a solicitor. It’s crucial that you have your own conveyancer who is acting in your interests in any house sale or purchase. Read our guide on How to find the right solicitor or conveyancer

8. Read the agreement carefully. Do you understand what you’re being asked to sign and the implications? Ask your conveyancer to look over it. The Property Ombudsman’s Code of Practice which all legitimate NAPB registered Quick House Sale firms have signed up to states: ‘any fees and charges, restrictions and liabilities should be confirmed in writing alongside the offer.’ So you should expect all the fees to be set out clearly.

9. 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 much shorter than that. Consider using a company that has no tie-in at all.

10. 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.

11. Ask to see the survey. If the company you’re using reduces the offer price, ask why. If a bad survey is to blame, ask to see the survey report.

12. 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.

Find and compare local estate agents with our free tool: compare typical fees and how quickly they sell a house like yours

Questions to ask quick house sale firms

Make sure you’re fully up to speed on how the companies that buy houses for cash operate from the outset. So you should ask:

• Who is buying the property? Is the company buying your property themselves or is someone else buying it?
• How will they pay? Is there proof that they have funds available?
• Can they guarantee the sale will complete within the timescale you need?
• What are the timescales for the sale? What are the different stages and when will each happen? What might cause timescales to change?
• Who is valuing the property and how?
• What might cause the offer price to change and when would this happen? Is the offer conditional, is it subject to a survey being undertaken or anything else?
• 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.

Will the amount I’m quoted on the phone or online be the amount I get?

Almost certainly not. Although the more reputable companies will be clear with you that it’s just an indication and that factors including a survey will be required to give an accurate figure.

Can quick house sale firms reduce the price at the last minute?

One of the most common complaints about quick house sale firms is that a seller’s offer is reduced at the last minute and that they must either accept the offer or pay fees to pull out.

If the quick house sale firm is signed up to the The National Association of Property Buyers, it must also sign up to The Property Ombudsman’s Code of Practice. Its code says ‘The offer price should not be reduced late in the process without a valid reason and these reasons should be fully explained to the client in writing’.

However, there may be valid reasons that could be argued, such as a bad survey. So bear this in mind before entering into any agreement.

How do I complain about a quick house sale firm?

If you’re not satisfied with the service you’ve received by a quick house sale firm, tell them and give them a chance to look into it and deal with your complaint. But if you’re still not happy, if the quick house sale firm is a member of the NAPB or registered with The Property Ombudsman you can refer the matter to the TPO.

However, while if the Ombudsman supports a complaint, it can make an award of compensation, this is limited to up to £25,000. And it says that amount is rare and ‘only in cases where it is established beyond doubt that significant financial loss has been incurred’. Its Annual Review for 2021 shows the largest award relating to sales was £18,000, while the average award was just £580.

If the quick house sale firm you use isn’t a member of NAPB or registered with TPO, you can’t take your complaint any further unless you take them to court.

6 Alternatives to quick house sale firms

Before considering using a quick house sale firm, make sure you’ve exhausted all your other options, which could help you to keep your home (if you don’t want to sell) or possibly help you to sell at a better price. Your other options include:

1. Seeking advice on managing your debt problems. If you’re considering selling your house quickly to pay off debts, then make sure you get debt advice first. You’ll find lots of advice on the Money Helper website and there’s a helpline too for people looking for help with money and debt. If you have a mortgage, you could also speak to a fee-free mortgage broker about remortgaging to pay off your debts.

2. Getting advice on your options from a mortgage broker. If you’re finding your mortgage payments are too high to manage, your first step should be to review your mortgage options and potentially remortgage to a better deal. You may find you can save money each month on your mortgage payment, especially if you’ve been on your lender’s standard variable rate.  Speak to mortgage partners at L&C for remortgage advice – plus they’re fee-free unlike many other brokers so there’s nothing to lose in giving them a call.

3. Negotiate with your mortgage lender. If you are thinking of selling up fast because you are finding it difficult to keep up payments on your mortgage and remortgaging isn’t the right option, always talk to your lender first.

Lenders usually have a specialist support team who can help you find a solution. There are several ways your mortgage lender can help you if you can’t pay your mortgage, such as offering you a mortgage holiday, this is when you take a break from repaying your mortgage or your lender might agree to reduce your monthly repayments for a few months to give you some breathing space. Or they may agree to extend your mortgage term to reduce your monthly payments. To find out more about your options may be, and the pros and cons, visit our guide Can’t pay mortgage: What now?

4. 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; you could try speeding up the sale by using multiple estate agents. Estate agents take their fee on completion of the sale so there are no upfront costs to you and they are incentivised to make the sale quickly. Or you may consider using an online estate agent which typically charge much lower fees, but charge hem upfront. You might find the amount you need to drop the price by is less than the 20%-25% discount a quick sale company would usually ask for. You can also sell your home yourself through private sale.

Find and compare local estate agents with our free tool: compare typical fees and how quickly they sell a house like yours

5. Consider selling at auction: But if you’re put off selling traditionally because of the risk the sale could fall through, it’s worth considering selling your house at auction. Once the hammer falls, the buyer has to put down a 10% deposit, then they have a month to give you the remaining 90%. So if you need to sell up quickly then an auction may be a good option for you. As long as there is enough interest and you’ve set a realistic selling price, your property should be sold by the end of the auction. For more information read our guide How to sell your house at auction.

6. Is part exchange on a new build an option? If you’re considering a quick house sale firm because you want to sell your current home to buy a new property, you may want to look into a part exchange with a new home builder. This is when a house builder will buy your home from you, enabling you to buy a new home from them.

There are some pitfalls with this, for example you’re unlikely to get full market value (although it should be much higher than if using a quick house sale firm), you’ll usually have to ‘trade up’ and you should consider the ‘new build premium’ too. Find out more in our guide Top tips for buying a new build home.

How can I sell my house fast for market value?

As we suggest above, if you instruct multiple estate agents you should sell your house faster as agents will be competing against each other to get the sale – otherwise they won’t earn any commission. Although you’ll pay higher estate agent fees if you do this. Read more in our guide on Multiple agency agreements: Does it help?

And don’t lose sight of the basics if you want to sell your house fast: declutter your home so it looks more spacious, spruce up the exterior of your home to boost your kerb appeal and consider giving your home a fresh lick of neutral paint. Find out more in out 12 tips to make your home more valuable and sell faster guide.

Frequently asked questions