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Sell House Fast – Beware of the Scams

Thinking about a quick sale of your house?

This post helps you answer this question more clearly.

We dispel some of the unfair negativity that surrounds our industry and go through some essential checks to avoid the scam artists.

Why House

Sell House Fast Companies – Who Are They?

Sell House Fast Companies – Who Are They? Although people have been buying and selling homes privately for years, quick house sale companies have really come into their own in recent decades.

Most have a website where you can find out more. You may also come across newspaper, magazine, billboard, online banners and social media advertisements.

The focus is on completing house sales much quicker than through estate agents and auction houses.

It’s very much a one-to-one process with no middlemen and no legal or other fees to pay.

Should You Use a Sell House Fast Company?

Of course, as a quick house sale company ourselves, you would probably expect us to answer ‘yes’ to this question.

In truth, however, this is not always the case.  Much would depend on your own circumstances and how urgently you need to sell.

We often speak to homeowners frustrated with their estate agents who are simply looking to sell up for a good price and move on.

There is often a simpler solution than using our quick cash sale service.  For example, a slight decrease in the asking price or selling through our express estate agency usually gets things moving.

Other times, more urgent action is required.  For example, you may have debts to clear or need to relocate fast.  Here, we’ll explore your real options are.  These can include:

  • Finding another way to clear your debts rather than selling up;
  • Seeing if there are better mortgage products available;
  • Swapping your mortgage from repayment to interest-only;
  • Extending your mortgage term to spread the payments out for a longer period;
  • Taking out a personal or secured loan (provided there is certainty that it can be paid back);
  • Renting out your property or taking on a lodger;
  • If you are facing repossession, speak to the council about support (our guide on how to stop repossession contains more potential solutions if you’re going through this).

Of course, each of these options has its own consequences that may not work – but our advice is always to think carefully before making any decisions.

Above all, you should never feel under pressure to sell until you are 100% sure.

Sell House Fast Companies = Scammers?

Sell House Fast Companies = Scammers? With the negative press that circulates in the marketplace, it’s sometimes easy to believe that all quick sale companies are untrustworthy.

One of the main criticisms is that our offers tend to be lower than the market value.  Many observers believe that it is simply not fair for home sellers to be ‘ripped off‘ by selling their properties for ‘cheap’.

Although some of these concerns have some merit, it’s worth bearing the following in mind…

Fast Sale Companies Buy Properties in Any Condition

Quick sale companies are often run by professional investors who buy property regardless of the condition and surrounding circumstances.  We’re interested in buying homes that turn off most people.

For example, here at Property Solvers, we buy flats with short leases as well as properties with squatters and problem tenants.  We take on properties with defective leases and titles, restrictive covenants, boundary disputes, negative easements, third-party consents and other complex legal issues.

Commercial, mixed-use and land schemes are all certainly of interest to us also and we buy properties that have structural problems, subsidence and Japanese Knotweed.

Sell Your House Fast - Any Condition Bought

We always stress that if the property is in a decent condition and there is no major rush, it is usually better not to use a fast house sale company.  This is one of the main reasons why an express estate agency sale may be a more appropriate solution.

Quick House Sale Companies Are… Quick!

The main reason why many vendors approach firms like Property Solvers is they want a swifter sale.  With estate agents, you’ve probably already realised that the process will take much longer.

Fast sale companies, on the other hand, are largely cash buyers.  This means that we do need to worry about taking out mortgages and have the funds ready to buy.  We also take out insurance policies to protect against other risks.  The result is that we can exchange and complete in as little as 7 days.

Sell Your House Fast (7-28 Days)

In line with our obligations with bodies like the Property Ombudsman, there will be no dropping out at the last minute.  What we pay is what we say.

Our reputation is on the line with and we do not want bad reviews for not fulfilling our promises.

Legal or Estate Agency Fees + Cash Advances

Quick house buyers normally cover your legal costs.  Also, as the sale is private, you also won’t have worry about estate agency fees.  The savings to be made here can be well into the £1,000’s.

When stopping repossession, Property Solvers pays for court fees, emergency legal costs and other related expenses.

Sell Your House Fast - No Legal or Estate Agent Fees

We are also able to pay some of the locked-in cash in your property before the exchange date.  This can be done, for example, if you have immediate debts pay or you have a new home and need to put down the deposit soon (or risk losing out).

No Mounting Bills or Other Obligations

It’s also worth bearing in mind that you will have to incur ‘holding’ costs whilst the sale goes through.  In addition to your mortgage payments, there will be your normal bills, council tax, insurance and such like.

With the quick sale process, you won’t have to worry about these issues.

Sell Your House Fast - No Bills, Council Tax, Insurance...

The example in the table below is based on a property with an asking price of £100,000.  You may notice that, once you total up the costs of sale and time delays, the difference between using an estate agency and quick sale company is not as much as you may think.

Estate Agents Vs Property Solvers

For Sale Estate Agency Sale
SIX MONTHS
Asking Price£100,000
Price Agreed£90,000
Estate Agency Fees (at 1.5%)£1,500
Legal / Solicitor Fees£1,000
Ongoing Mortgage Payments*£3,000
Maintenance and Cosmetic Repairs**£1,650
Council Tax and Other Bills**£1,000
Final Sales Price£81,850
Sold Fast Cash Sale
SEVEN DAYS
Asking Price£75,000
Price Agreed£75,000
Estate Agency Fees (at 1.5%)£0
Legal / Solicitor Fees£0
Ongoing Mortgage Payments*£0
Maintenance and Cosmetic Repairs**£0
Council Tax and Other Bills**£0
Final Sales Price£75,000
Price Difference £6,850

* These payments can be higher or lower depending on your own mortgage circumstances

** These costs are based on our own experience of owing properties at this value

Property Solvers value property using data from the Land Registry, Hometrack and RICS-approved surveyors

We will also discuss our "Hybrid Estate Agency" and "Assisted Sale" Options if we see they are more appropriate solutions for you.

Some Facts About Estate Agency Sales

It’s common knowledge that agencies and, increasingly, auctioneers over-exaggerate the real value of properties.

With many facing a great deal of competition, promising home sellers a higher value is a classic way to win business.  The is reflected in the following facts:

House Selling Facts 2019House Selling Facts 2019

The offer made by a quick house sale company may seem too low.  But the truth is that we avoid the speculative and, sometimes dishonest, business practices used by estate agents.

Here at Property Solvers, for example, we take the time to demonstrate the true value of a property using Land Registry-sourced data.  We also take into account differences in size and other characteristics to ensure accuracy (see our house valuation guide here).  It’s very rare for our valuations mismatch those of professional surveyors.

Remember also that using a quick house sale service brings you much more certainty of sale compared to an estate agency.

Sell House Fast Checks

Sell House Fast Checks Unfortunately, there are still rogue traders lurking about our industry.

These days it’s quite easy to set up a ‘fast house sale’ website and call oneself an expert.  This often means that home sellers get bad advice from amateurs and the industry gets blamed as a whole.

Yet, on the back of the Office of Fair Trading report in 2013, an emerging group of property buyers is working to change the quick house sale industry for the better.

Trade Body Membership

You can check the fast sale company’s membership to a number of trade bodies and government institutions.

This means that the company adheres to enforceable regulations and legal requirements.  You will then at least have a place to turn to if there’s anything you’re not happy with.

Below are some of the organisations that Property Solvers is a part of:

The Property Ombudsman (TPOS) – A government-approved trade body that protects home sellers. Membership means that we must adhere to a strict Code of Practice. If you are not happy with any aspect of our service, your concerns will be heard fairly.  The complaints enquiry telephone number is 01722 333306. Lines are open Monday to Friday from 9am to 4:30pm.(excluding bank holidays).
National Association of Property Buyers (NAPB) – As well as being signed up to the Property Ombudsman Code of Practice (above), members of this body must commit to high standards of transparency and fairness during the quick sale process.
Trading Standards (Approved Code) – We are part of this body by virtue of our express estate agency service.  However, many of the rules overlap with our work as quick house buyers. We therefore adhere to the Consumer Codes Approval Scheme (CCCS) which sets out the principles of effective customer service, protection and trust. The Consumer Helpline number is 03454 04 05 06 (call charges apply and lines are open Monday to Friday from 9am to 5pm).
Anti-Money Laundering regulations – Signing up to these regulations means that any exchanged funds are fully-protected by the law. You can also report any suspicious activity to HM Revenue & Customs on 0800 595 000 (lines are open 24/7).
Information Commissioner’s Office (ICO) – Our membership of this organisation means that we’re obliged to keep your details 100% secure under the Data Protection Act (1998). We can only pass on your details to a third party with your full consent. The ICO helpline number is on 0303 123 1113 (lines are open Monday to Friday between 9am and 5pm).
National Landlords Association (NLA) – Dealing with landlords looking to sell their tenanted properties, we felt it important to accredit Property Solvers with this renowned body.

Other Quick Sale Company Checks

Below is some other research into the fast house sale company you may want to do:

  • Check the firm is registered at Companies House (where you can also view their accounts, see how long they have been in business and download information about the Directors).  Remember that many quick house buying firms have similar names;
  • If the buyer is an individual, ask for their personal credit report (from a reputable agency such as Experian or Check My File).  You can also obtain more specific information about the Directors using these services;
  • Often, it’s a good idea to check the company that will be buying the property from you (which may be different to the initial company you contacted);
  • Make sure there are no hidden charges.  It’s sometimes worth asking an independent solicitor to look through any contractual agreements;
  • It’s often unnecessary, but you may want to check for proof of cash funds.  Genuine cash buying firms should be able to show a recent bank statement or a letter from a solicitor (registered at The Law Society).  An undrawn debt facility is also valid, but check the details of the loan if there are any doubts;
  • Ask the firm to provide you with reviews of previous happy customers;
  • Check that the firm has a legitimate office address.  They should have no issues with having a face-to-face meeting at their office or in your home;
  • Confirm how long they have been in the property business (ask for proof);
  • Check the age of the fast sale company’s website here;
  • Ask for their previous track record of exchanging and completing on house sales quickly. If they can’t show this, then you’re better off either looking out for another firm or keeping the property on with the estate agent;
  • Request confirmation that the price will not be dropped at the last minute.  Ask for a letter from their solicitor confirming that this will not occur (see below).

Watch Out: Unrealistically High Offers for your Home

A common scam is for a fast sale company to make an offer that seems reasonable at the start.  They use this tactic to raise your expectations and get a commitment.

Perhaps you then start packing your things, organise a new place to live and get the other necessaries in order.

As the sale gets closer, the company then suddenly says they can only move forward if you drop the price.  In the industry, we sometimes call this ‘gazundering‘.

Of course, you could walk away – but sadly, some vendors end up accepting as they are in a rush or have some other pressure.

Remember, this is a serious breach of consumer rights law.

If this situation occurs, even if your back is against the wall, you can immediately contact the Property Ombudsman (01722 333306) and/or the National Association of Property Buyers (01903 331329).  They will put you in touch with a quick sale firm who can help (within hours), strike off the company and potentially assist you with taking legal action.

Note that there are certain exceptions.  If, for example, issues such as major damp or structural problems have not been clarified from the start, then the buyer has the right to ‘pull out’ or approach you to discuss a renegotiated price.  This follows the adage of ‘buyer beware’ (caveat emptor).

Any new offer price usually factors in the extra expense of dealing with the problem.  But, remember that the final decision remains with you.

Sell and Rent Back Your House Scams

Please be wary of quick sale companies that offer to sell your property and rent it back.  Any property buying firm that wishes to offer this service must be registered at the Financial Conduct Authority (FCA).

This means that they would have to pay quite a large sum of money and also run through a number of detailed compliance processes.  You can check whether the firm is listed as a sell-and-rent-back provider via this link.

‘Guaranteed Price’ Fast House Sale Companies

A new breed of fast-sale company has emerged where you can receive between 93 and 97% of your home’s value after 90 days.

If you need to access the cash sooner, it is possible to borrow the amount at a daily interest rate (subject to approval).  After the 90 days, you will receive the pre-established value minus a fee of around 2-3%.  This happens even if the property does not sell.  They will continue to market the property and you will receive anything above their guaranteed price when it does sell (although the fee will be higher).

This is an interesting option, especially if you have secured another home to purchase and need to move quickly.  However, this process has received mixed reviews from homesellers.  Not all properties fit into the company’s criteria and questions remain in relation to the valuation process.

Perhaps time will tell, but we would suggest paying close attention to the small print.  As with any fast sale company, ask for proof of purchase funds.  You may also wish to ask an independent solicitor to review how the agreement would work.

This type of transaction is untested in a court of law so dealing with any problems could be expensive.

A Property Solvers Quick House Sale

A Property Solvers Quick House Sale We hope this post has at least given you some idea on to how to keep your eyes open when approaching a quick house sale company.

Operating as a national private buying company, Property Solvers is well-aware of the negative press that sometimes surrounds the work we do.

For this reason, we differentiate ourselves by genuinely looking to help people whilst exploring all of their options.  We prioritise this process before explaining how we actually operate.

We also set up our express estate agency as we see that a quick house sale is not for everyone.  It often makes more sense to list with our agency and get a swift sale for the full market value.  With us, there are no up-front fees and we also won’t tie you into a minimum contract.

We are in the industry for the long-term.   It simply doesn’t make sense to fool home sellers and sacrifice our established reputation as professionals.  As mentioned above, we usually find that there is a very simple solution to what may seem like a complex problem.

This means that you do not have to work with a fast house sale company if you really do not want or need to.

To discuss any aspects of the sale of your home, with absolutely no obligation, please contact Property Solvers on 0800 044 3733 (freephone).   Our line and chat service are open 24 Hours, 7 days a week.  Alternatively, fill your details in the contact box below or e-mail us at info@propertysolvers.co.uk.

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