Cut price selling.
ASK THE EXPERT
Q. What’s your opinion of the “quick house sale” business?
A. The quick house sale business model is basically designed to do just what it says on the tin: ie, give home-owners a guaranteed quick sale, but at a substantial discount to the full market value.
All well and good, you might say. After all, like pay-day lenders, such firms may well argue that they are offering a service which meets a growing need.
However, as with payday lending, this is a service aimed fairly and squarely at the most vulnerable – those distressed home-owners who for whatever reason are desperate to sell quickly, at almost any price. As such, it is clearly open to abuse – a fact highlighted in a damning report just published by the OFT. While some operators may be offering a valuable service, this report says that consumers are often not given enough information about the original offer. More concerning still is the fact that it is not uncommon for last minute, often significant, cuts to be made to the offer price.
In one case quoted, a home seller close to retirement and wanting to sell as quickly as possible accepted an offer of £73,000 – only for this to be slashed later to £58,000. To add to the pressure on the unfortunate seller, the firm even sent a courier round the same evening with new documents for signature.
In another case, an 87-year-old seller was offered £120,000 - which was later dropped to £85,000.
The report also says that while firms claim to offer ‘quick’ sales, in practice they often tie home sellers in to lengthy periods of exclusivity while trying to raise cash or find buyers.
The OFT has written to 120 operators in the sector, ‘advising’ them of issues identified in its report, and has also opened an investigation into three particular companies, which it has not named.
But despite all this, the OFT has stopped short of proposing that the business should be regulated – a decision which has been roundly criticised by The Property Ombudsman, who said: “The result is an unsafe environment for consumers at a time when they are making important decisions concerning the sale of their home, perhaps when under severe financial or health pressures.”
So, what’s my personal opinion? Unless you are absolutely desperate, I would stay well clear – and go to a decent estate agent instead.