"Quick Sale" Warnings - how to use a home-buying company safely
WARNING. Not all house buying companies are genuine. Follow these essential steps to avoid rogue traders.
Our House Buying Service
As a company we offer home sellers an alternative to the traditional way of selling a home. Instead of waiting uncertain and often long time selling through an estate agent, you can sell to us directly in a simple, straight-forward sale in a timeframe to suit your needs. We can buy your home from you directly, meaning you can sell your home fast.
Unfortunately, we compete against many companies in the so-called "Quick Sale" industry where, sadly, there are many “back street”, rogue companies you need to steer clear of at all costs if looking to sell your home outside of a traditional estate agent.
During an investigation in 2013, the Office of Fair Trading identified numerous misleading, unscrupulous operators in the "Quick Sale" sector who operate outside of any regulative guidelines. These rogue traders have no place in the housing market, but are incredibly difficult for regulators to stamp out - they're still around today.
As a homeowner, these "Quick Sale" companies could cost you tens of thousands of pounds, and a great deal of stress and heart ache.
To avoid this happening to you, we've provided a list of four essential steps to follow when selling your house to a house-buying company. These steps will help protect you from these dangerous rogue traders, and could save you from being conned out of thousands and thousands of pounds.
NEVER Sign Anything With a House-Buying Company
A genuine house buying company will never ask you to sign anything up front.
The only time you sign anything when selling your home is when your solicitor asks you to.
Why would a company get me to sign something with them?
Because many companies only pretend to be property buyers. Really, many are just property brokers.
How do property brokers work?
They’ll agree a fixed price with you on paper and they'll get you signed into a contract called a Purchase Agreement or an Option Agreement. These are very one-sided contracts that give many rights to the property broker and take many rights from you.
In some cases these contracts will tie you in for months, with huge penalty clauses if you try to cancel.
What does this mean for me?
Instead of them buying your house from you, the company will tie you in with this Agreement then they'll try to sell your house for £10,000 to £20,000 more than they’ve agreed with you, and they pocket the difference.
Besides how misleading this practice is, the other big problem is that the quick sale they promised takes months! You may not be able to cancel because of the contract you’ve signed!
Finally, they have no control over the buyer they’ve found either – the buyer will often come back and reduce the price, and can pull out at the last minute too.
NEVER be forced to use a solicitor the company recommends to you
A genuine house-buying company will never force or pressure you to use a specific solicitor.
Why would a company insist I use a solicitor they already know?
In Step 1 we warn about companies using Option or Purchase Agreements. A rogue company can sometimes make tens of thousands of pounds from these agreements, leaving you out of pocket.
Of course, a solicitor genuinely acting in your best interest would never allow this to happen, so the rogue company needs a solicitor they already know to act for you in the sale.
The solicitor helps facilitate their contract, and ultimately pays them the money.
Is there anything else the solicitor might do behind the scenes?
Unfortunately, yes. The solicitor they recommend may also help them to hide the fact that they’re trying to find a real buyer for your house behind the scenes.
Or even worse, by hiding the Option or Purchase Agreement in the genuine paperwork they send to you – so you aren’t even aware of what you’re signing.
NEVER agree to pay your own legal costs
A genuine house-buying company will always pay your legal fees – and must put that in writing to the solicitor acting for you as well.
Why would a company want me to pay my own legal fees?
It's not to save themselves a few hundred pounds.
Many companies work off a process called “gazundering”. This is where they offer you an inflated price at the start, then reduce their offer just before completion.
Why would they do this?
The high starting price is to entice you in to accepting the offer from them – instead of one from a genuine house buying company who may have made you an offer as well.
But they already know they're going to drop the price later to the amount that they really want to pay. Many of these companies will leave it until the last minute – right up until you’re all packed up in boxes and removal men are outside.
This can be extremely traumatic, and the company knows that a lot of people who wouldn't have accepted their offer originally will have no choice but to accept it now.
It's a horrible underhand tactic and, sadly, many many house-buying companies use this tactic all the time.
How does this relate to legal fees?
If the company gazunders you and you choose not to accept their low offer, you may be left with as much as £1,000 in legal fees for the work your solicitor has done. The company knows that a lot of people cannot afford this, so many will have no choice but to accept their offer.
NEVER deal with a House Buying Company who are not regulated
Why would a company choose not to be regulated?
As we see time and time again on TV shows like Rogue Traders, some business owners have no regards whatsoever for their customers.
Organisations like the Property Ombudsman exist to protect consumers, and they have the powers to fine, punish and publicly reprimand any regulated companies who break the rules.
This is why rogue traders choose not to be regulated. If they're unregulated, they have no one to answer to, so they can act in unscrupulous ways and get away with it.
Can't unregulated companies be caught, and shut down?
Unfortunately these companies tend to change their name often so they can’t be caught. This makes it very difficult for regulators or law makers to stamp them out. This is why you need to look out for yourself - and why we've put these steps together to help guide homeowners.
Why might a regulated company still not be safe to deal with?
Companies can be regulated but still just be property brokers trying to tie you into option agreements, or they may be a house-buying company who rely on gazundering.
This is why dealing with a company who are regulated is only the bare minimum. You still need to follow the other three steps above as well (never sign anything, don’t be forced to use their solicitor, and never pay your own legal fees).
If you follow all four steps, you can avoid the rogue traders. If you’re unsure about a company you're engaged with then ask your solicitor, or one of the team at Yes Homebuyers, to make the relevant checks.
We're One Of The Only House Buying Companies Who Comply With These Four Steps
We will never ask you to sign anything
Use whichever solicitor you're happy with (we can recommend one for your convenience, if needed)
We'll always pay your legal fees (and we'll put that in writing to your chosen solicitor as well)
We're proud to be a fully regulated house buying company.
We are working to help stamp out unregulated and unscrupulous companies, and all the team here at Yes Homebuyers are trained to help spot rogue traders.
We offer clients a free service where we can conduct a regulative check on any other house buying company you may have been dealing with to help highlight any potential issues in their practices. This can help determine whether the offer you’ve received looks to be genuine or not.
We aim to beat all offers from other genuine house buying companies
If the offer you’ve received does appear to be genuine, we will always look to beat it for you too. And if we can't, we'll pay you £500. Really.
If you'd like an offer from a genuine "we buy any house" company, or if you'd like us to take a look at an offer you've received elsewhere, call us now for free on 0800 133 7687 (freephone).
Alternatively, hit one of those big blue "Get An Offer" buttons, enter your details, and our team will be touch within 24 hours.
HOW WE CAN HELP
Selling your home to Yes Homebuyers
- Yes Homebuyers buy your home directly from you so you can sell your house fast and avoid waiting around to find a buyer on the regular market.
- We offer flexible timeframes to suit you and on average, complete a sale within 30 days.
- Yes Homebuyers' quickest completed purchase was made in six days.
- We guarantee the price we will pay, unlike some buying platforms who reduce their offer shortly before completion.
- There are no fees or costs involved and we cover all legal fees involved.
- There are no contracts or tie-ins even if you accept an offer, and no viewings to take care of.
About Yes Homebuyers
We can purchase your home from you directly, giving you the easiest, fastest home sale possible.
Contact us for a free valuation and offer. We can buy your home in as little as 14 days.
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