Avoid the Quick House Sale Scams
In its report, the Office of Fair Trade (OFT) has identified some practices within the property buying industry that concern them. Vendors considering a quick house sale should do their research and be aware that not all property buyers are created equal!
In their study, the OFT has identified business practices that may not comply with the law. These practices risk harming home sellers by limiting their ability to make free and informed choices. They also risk giving the industry a bad name, undermining the providers that do deal with sellers fairly and putting off sellers who might benefit from the service.
If you want to make sure to work with one of the legitimate quick house buyers, make sure to ask the following questions of anyone you speak to.
1. How do they determine the offer price?
Home sellers are not given enough information about the status of the initial offer price and that factors such as an adverse survey may cause it to be reduced later on. Last-minute and often significant reductions in the offer price raise concerns that providers may be exploiting sellers' circumstances, especially when providers do not give the reasons for reductions in the offer price.
How does Spring determine an offer?
Our procedure is clear, open and transparent. We make an indicative online offer based on the sellers' view of their property value. Then after speaking with the seller and gathering more information, we will carry out a desktop valuation and give a firmer offer subject to valuation and survey inspection. After these reports, a formal offer is made to the vendor. Any changes are clearly explained and justified and the seller is welcome to see the reports. It is not company policy to change the offer after this point. This part of the process usually this takes 7-14 days. We make it our responsibility to ensure sellers are aware of our process and informed at every step.
2. What is a quick house sale?
Businesses that specialise in quick house sales, referred to as 'providers' in this report, claim to offer a much faster sale than the home seller might hope to achieve on the open market. In return, however, the home seller must usually accept a 'below market value' price for their home (for example, 80 percent of the full market value).
How does Spring's Quick House Sale offer work?
Spring offers a quick cash sale service and will be upfront and transparent about the price we are willing to pay. At Spring, we can complete as quickly as seven days and have completed in as little as 3. We will buy your property directly and we do not pass your details to anyone else to buy the house. This means we can deliver on the timescales and offer we set out because we do not rely on third parties outside our control.
3. How fast is the speed of the service?
On their websites and in other marketing, providers tend to stress the fastest possible times to completion (for example 'seven days'), rather than the more typical times (three to four weeks). Few explain clearly the basis for their claims or the factors that may lengthen timescales.
How quick are Spring?
We can complete in seven days if that is your desire. Naturally, most people will probably want longer to pack up belongings and prepare for your move. We are completely flexible and can work to your timescales, but if you want a completion in seven days we can meet those deadlines. Unlike most quick house buyers, we do not rely on 3rd party funds, so make all decisions in-house, and thus, faster.
4. Are you required to sign a long-term exclusivity agreement?
The OFT is also concerned when providers require home sellers to sign long-term exclusivity agreements. The OFT cannot see how lengthy tie-ins square with the promise of a quick house sale. Home sellers who want a speedy sale should question why quick house sale agreements should last much longer than four weeks.
What does Spring do?
We could not agree more. We believe this practice is frankly deplorable and we have seen companies attempt to charge £7,500 to release a seller from such an agreement so that seller could sell to us to avoid eviction. Do not sign any agreement like this. Spring has reported other firms for this practice and we believe it targets especially vulnerable vendors. We will not require you to sign any long term lock-in agreements.
5. Who is the actual buyer?
Not all providers are being clear with home sellers about their service: are they going to buy, find a buyer or pass on details to another provider?
Are Spring the actual buyer?
We are the company that will buy the property and your details will not be passed to a third party.
6. How does the house buyer pay for the purchase?
Not all providers are explaining clearly the buyer's financial position: does the buyer have cash funds available now or must they borrow or raise finance first?
How does Spring fund the purchase of a property?
Spring will use either our existing company capital, cash funds or our preapproved finance facilities. Our funding and our facilities enable us to complete within seven days. We do not rely on investors or retail or mortgage lending so we can deliver on the timescales we commit to.
7. Is the house buyer regulated?
If a house buyer is not part of the National Association of Property Buyers or a member of The Property Ombudsman, you may not have recourse if they behave unscrupulously. Make sure to ask what organisations they belong to.
Are Spring regulated?
We were a founding member of The National Association of Property Buyers
and helped draft The Property Ombudsman
's strict code of conduct for property buyers. We are fully and voluntarily regulated by these organisations and have a transparent complaints policy, should you need to, but of course, we strive to deliver such an outstanding service, we are confident that this will be a very unlikely situation.