Newspaper article The Journal (Newcastle, England)

Beware the Pitfalls of a Speedy House Sale; as the Trading Watchdog Uncovers Evidence of "Shoddy Practices" within Firms That Offer Quick House Sales, Vicky Shaw Looks at the Benefits and the Downsides of Selling Your House at Speed

Newspaper article The Journal (Newcastle, England)

Beware the Pitfalls of a Speedy House Sale; as the Trading Watchdog Uncovers Evidence of "Shoddy Practices" within Firms That Offer Quick House Sales, Vicky Shaw Looks at the Benefits and the Downsides of Selling Your House at Speed

Article excerpt

Byline: Vicky Shaw

OVER 100 firms in the 'quick house sale' sector are being urged by the Office of Fair Trading (OFT) to make sure their business practices are up to scratch.

These companies function by offering to buy a property directly from the owner, or to find a buyer very quickly, then in return for fast access to cash, the seller will accept a below market value price for their home.

Firms that offer these speedy sales can help homeowners looking for a guaranteed and hassle-free way to get their property off their hands, and the OFT said it can be a "dynamic and innovative" way to make a house sale.

Of course though, there is a big catch - people who sell their home in this way usually receive around 10-25 per cent less than the market value of the property, and the OFT's investigation found some hard-pressed consumers end up handing over their home for less than half of its market value.

It has seen firms dropping the prices they will pay by 53 per cent on initial offers which were already below market price, leaving people tens of thousands of pounds out of pocket compared with the market value. The average price for a quick house sale is around PS100,000.

The watchdog has found that some home sellers, particularly those in vulnerable situations or older people, are not always able to use the sector confidently.

Concerns have also been raised that some firms will offer one price, then sharply reduce it at the last minute, when the seller is too far down the line to back out.

In one case seen by the OFT, a seller approaching retirement accepted an initial offer from a firm of PS73,000, only to have it reduced to PS58,000 later that day.

The seller agreed to the new offer because they felt caught "between a rock and a hard place".

A sudden drop in a firm's offer can sometimes be caused by factors like a survey bringing up problems with the house, but the OFT is concerned that firms are not always being clear enough about how the initial price they've offered can change.

The watchdog said some firms are also making misleading claims about the value of the property or the level of discount, and are trying to lock consumers in with heavy penalties if they decide to sell to someone else. …

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