Property buying companies – How they work and what they typically pay for your home.

We’ve decided to write a short blog to answer some of those questions you might have if you’re thinking about selling your home to a house buying company.

There’s lots of these companies around and it’s important that you avoid the scammers and only work with trust worthy businesses. Let’s dive straight in and get you up to speed with how it all works!

What are house buying companies?

In short, house buying companies exist to offer the seller a quick and certain sale. They can usually transact much faster than a traditional estate agent and condition of the property isn’t usually an issue. Typically, you’re able to sell your home within a couple of weeks and they provide you with an offer within 24 hours.

Of course, this service does mean that you are likely to receive less than you would selling your home using an estate agent or auction house.

The graph below demonstrates this…

How much below market value do house buying companies offer?

Expect to receive an offer around 80% of your property’s market value. Some may claim to give you 90%+ but this is usually just a trick whereby they’ll knock you down at the very last minute to somewhere around 80% or less. As you can imagine, this would leave you in a stressful situation, especially when you had accounted for more.

Why do cash home buying companies only offer around 80% of market value?

They have their own costs involved in purchasing your property quickly, such as stamp duty, short term finance interest, legal costs, re-selling fees with estate agents or auctioneers, staffing, marketing spend, capital gains tax etc.

So, as you can see from the list above, they have a lot of costs themselves which is why 80% is a typical figure.

 

How do house buying companies value my property and what happens next?

They use various methods such as;

·        Bespoke online valuation software.

·        Compare sold price data online.

·        Instruct a RICS chartered surveyor to visit your property and produce a valuation report.

Next, you’ll receive a formal offer which should be backed up with evidence so that you understand why you’re being offered what you are. If you’re satisfied with the offer, you sign the offer documentation and solicitors will be instructed. Typically, the house buying company will handle all of this for you to keep the process as simple and speedy as possible.

Things to watch out for.

As you can imagine, selling an asset like a house or home is a big deal and the last you want to happen is get caught by a scammer.

At Quickly Sell Home, we’d always suggest that you check to see if the company is registered with the property ombudsman. This means that they will have to follow strict codes of practice, and you also have some recourse if the deal falls sour. The ombudsman can and will get involved to resolve the situation for you.

For any companies who don’t follow the rules or try and scam people, will quickly be taken off the list and put on the removed register which is available for all to see!

You can also visit the NAPB (national association of property buyers) which will only allow home buying companies to be members with them providing they’re registered with the ombudsman.

If they’re on neither list, then you want to look elsewhere and pick a reputable company instead.

Other things to consider..

• Shopping around for the highest offer. If it’s too good to be true, then it probably is! Walk away as they’ll likely drop the price last minute.

• Ask for exchange of contracts early. At this point the contract becomes legally binding, and they can’t change the price.

• Don’t pay upfront for any ‘valuation costs’ or sign into any withdrawal/cancellation fees.

What about fees and hidden costs?

Usually with ‘We buy any home’ type companies, you don’t incur any costs or fees and certainly shouldn’t be paying for anything up front. Their offer should consider any fees they need to pay such as solicitor and surveyor costs etc.

When might you want to sell your house to a home buying company?

• Chain break or your buyer has withdrawn meaning you may lose the chance to buy your dream home. Speed and certainty may be the most important factor.

• Divorce – assets need to be sold and split between the beneficiaries.

• Probate – inherited a property and need to sell quickly.

Is selling my property to a house buying company a good idea?

Well that depends on your own circumstances, wants and needs.

• Is price the most important factor? If you’re happy to hold out for the best possible price, then use a traditional estate agent. Just expect this to be the slowest option.

• Is speed and certainty more important than price? If you need to sell quickly and with certainty, use a property buying company like Quickly Sell Home

We hope you found that useful. If you want to find out what we can offer you for your home in return for a quick and certain sale, fill out our simple form and we'll be in touch within 24 hours.