Three “quick sale” companies that promise to sell properties for struggling homeowners are to be formally investigated by a regulator.
The as yet unnamed businesses promised faster sales than could be achieved on the open market for a knock-down price. But the Office of Fair Trading (OFT) is investigating alleged unfair practices that left some sellers tens of thousands of pounds out of pocket. It found many other operators in the sector to be “open and fair”.
Quick house sale providers offer to buy houses in as little as seven days, but at a discount – typically between 10% and 25% – of the full market value.
The OFT discovered cases which saw reductions of up to 53% of the home’s market value, amounting to many tens of thousands of pounds.
The service may be used by those wishing to pay off debts, people facing declining health, or those relocating overseas or moving for a new job. It remains niche, representing only 0.5% of UK residential property sales. Total sales are estimated at between £500m and £900m.
The regulator found that, for the most part, the sector was “dynamic and innovative”, benefiting many customers who wanted a quick, hassle-free sale.
However, its investigations, which began in April, uncovered examples of firms exploiting people’s difficult financial circumstances. They included:
- Reducing the price at the last minute when the seller was already financially committed
- Making misleading claims about the property’s value and the discount
- Stressing the speediest sale of seven days, rather than the typical three to four week timetable
- Inducing sellers to sign up to exclusivity contracts, which carried large severance penalties.
After putting the industry under the microscope, the OFT has now launched formal investigations into three firms, which have not been named. Consumer group Which? has called on the regulator to name the trio.
Another 120 firms have received letters from the OFT advising them to check that the way they operate complies with the law.
Read the article in full here: http://www.bbc.co.uk/news/business-23588742
Tips for potential sellers:
- Consider whether a quick sale is the best option
- Check the provider’s credentials
- Do not proceed until vital details, such as how they are valuing the property, are explained
- Do not accept verbal promises
- Watch out for long tie-ins
- Get independent legal advice if you are unsure what you are signing
- Be honest when answering providers’ questions
If you need to sell your house quickly, our trusted, specialist property solicitors are on hand to give you independent legal advice. Call the Abacus property team on 0161 833 0044 or email firstname.lastname@example.org