by Mark Johnston
Quick house Sales.
Quick house sale providers offer to buy a house or find a third party buyer very quickly, some in as little as seven days, but they are usually at a large discount to the full market value.
The National Association of Estate Agents (NAEA) has recent reported a sharp rise in the number of property companies offering sellers a quick sale service.
People who use these particular providers seem to be those in financial difficulty, those facing repossession and those who need to sell their property quickly either following a relationship breakdown or the elderly who may need money quickly to pay for care.
Figures from the Council of Mortgage Lenders (CML) show that at the end of 2012 approximately 157,900 households had fallen behind on their mortgage payments.
Stephen Hill, partner and professional negligence lawyer at Bolt Burdon Kemp, a niche firm of compensation solicitors, suggests that “if the quick house sale company is offering to sell the house in seven days, then it is reasonable to expect that the home owner is going to have to accept a significantly discounted price”.
Mark Hayward, president of the National Association of Estate Agents (NAEA), stated “the tough economic conditions mean that in some cases sellers are pressurised in to making quick decisions to sell their property. They sign the contract at an agreed price only to find that they are offered a vastly reduced rate just before the sale”.
Christopher Woolard, director of policy, risk and research at the Financial Conduct Authority (FCA) added “consumers facing repossession of their home are in a very vulnerable position and it is important that they are not pressured in to making poor decisions”.
While these particular providers may offer a valuable service there are concerns that some practices may lead to many home owners receiving much less for their property than it is actually worth.
Cavendish Elithorn, a senior director at the Office of Fair Trading (OFT), says “businesses offering quick house sales may provide a useful service for home owners who need to unlock cash in a hurry. However, they are often used by consumers in vulnerable situations”.
In light of this the Office of Fair Trading (OFT) has decided to investigate the ‘quick house sale’ market over concerns about the risk of consumers being misled and also suffering very high losses.
The Office of Fair Trading (OFT) has therefore asked over 50 quick house sale firms to provide them with information on their business models and practices. They will also be collecting evidence from valuation experts, estate agents , debt advisors and not forgetting home owners.
Kay Boycott, director of campaigns, policy and communications at Shelter, the housing and homelessness charity, backs this investigation and states “we would urge anyone considering quick sale to ensure they get advice from an organisation like shelter so they fully understand what choices are open to them”.
Many experts feel that anyone considering a quick house sale should take a step back and consider their other options.
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