Using property buying firms to sell homes fast at a discount is on the rise but beware of rogue traders
Some of those in dire straits have turned to property buying companies, which have seen an upturn in the number of people who want to sell their homes quickly and at a discount to release cash.
The average reduction on the value of a property when you sell this way is generally around 20 per cent, though there are no agents fees and no solicitors fees to pay and the sale can be completed with money transferred to your bank in as little as three weeks.
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Hide AdJonathan Rolande, co-founder of House Buy Fast, launched his property buying business in 2008, in the middle of the financial crash. He is also the founder of The National Association of Property Buyers, NAPB, a respected organisation set up to improve standards in a sector that has its fair share of rogue traders and to help homeowners make a more informed choice.
He has worked closely with The Property Ombudsman to develop a code of practice for residential property buying companies and says: “For those buying and those on a variable rate or about to go on one after a long period on a lower fixed rate, the shock is going to be seismic.
“The average mortgage is about to become about £3,000 a year more expensive, at a time when food, fuel and taxes are taking a huge chunk out of disposable income.”
House Buy Fast saw a rise in the number of property owners looking to sell quickly three months ago.
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Hide Ad“That’s when we saw a spike in landlords selling rental property to us because of new legislation in the sector and because their buy-to-let- mortgages had started to creep up.
“Selling to us and companies like us means they have one viewing, one survey and a quick decision on price plus and they avoid having a period with no rent coming while a property is on the open market,” says Jonathan.
House Buy Fast has also seen a 50 per cent increase in the number of homeowners wanting to sell because they can’t fund their mortgage payments.
Wetherby based The Property Buying Company and Leeds-based SmoothSale, which are members of the NAPB, have also seen a rise.
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Hide AdJohn Hughes sold his house to The Property Buying Company after struggling to pay his mortgage when out of work and says: “I couldn’t keep up with my payments and realised I was fighting a losing battle and that my home could be repossessed.
“The time frame was such that using an estate agent would take too long and I needed a quick sale and was willing to take a hit on the price.
“The house was valued at £260,000 by an estate agent but that was ambitious so I accepted an offer of £204,000 and there were no fees at all.
“It was a stressful time but my experience with the company was good. The process took three weeks and selling the house was such a relief.”
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Hide AdUsing a property buying company is not just for those in financial distress, both House Buy Fast and The Property Buying Company say that in recent years
they have seen more homeowners taking a discount to sell quickly even though they don’t have to.
Jonathan Rolande says 85 per cent of clients wanting to sell could afford to do so through an estate agent and stresses that they should do so if they can.
“We should be a last resort but sometimes vendors are tired of waiting for a buyer or sales fall through or the survey has found something wrong with the house, such as structural defects that make things more difficult for a normal buyer, and they come to us.”
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Hide AdA recent example was the owner of a buy-to-let property who was strung along by a would-be buyer for six months during which time she was paying council tax, a mortgage and insurance costs, before selling via House Buy Fast in a process that took 10 days.
John Christie, CEO at The Property Buying Company, adds: “We have people who need to sell quickly for financial reasons and others who do it for convenience, like those who have found their dream home and want a quick sale so they can buy it.”
He adds: “We are living in a fast paced culture where people are used to getting things on demand and that’s one of the reasons why this kind of business is becoming more mainstream.”
*If you have to use a property buyer make sure that they are a member of the National Association of Property Buyers. It has a list of members on its website www.napb.co.uk