Quick house sale companies to be investigated

Posted by Arron Dickens in Mortgages on 9 August 2013 - Arron is a Product Manager at checkmyfile

The Office of Fair Trading is looking into firms which offer to buy your house quickly, in exchange for accepting a below market value price. They have written to 120 companies asking them to provide information about the contracts that are offered to customers. It is alleged that three companies are already being investigated for unfair practice and illegal contracts.

The deals could have cost customers tens of thousands of pounds, as some companies may have offered less than half of the market value of the properties that they were purchasing. Typically homeowners are offered 10-20% less than property value at first, but the OFT has indicated that some firms are reneging on offers and reducing the price massively at the last minute.

Gaucho Rasmussen of the OFT says, "Responsible quick house sale firms offer a valuable service to consumers who want a fast sale. However we have also seen potentially illegal behaviour and as a result the OFT has opened investigations into three companies.”

”These companies are typically being used by those in the most desperate situations, who often have no choice but to sell their homes to repay debt. In these circumstances, if the customer is suddenly held to ransom and the price offered for their home is slashed, they may not have a choice but to accept the lower offer. “

”The OFT is also worried about claims that sales can be completed within seven days, with three to four weeks being the more typical time frame. While this is still quicker than most normal house purchases, it is not unknown to be able to sell a house at full market value within a month or so. This results in customers of this ‘quick sale’ firms losing out on thousands of pounds for the sake of just a few days or weeks. “

"When sellers get a bad deal, they could lose a lot of money. We want to ensure that consumers can have confidence in this sector and put an end to these shoddy practices."

Consumer group Which? has called on the OFT to name the three firms it is investigating. It also says, "Anyone thinking about this as an option should shop around and check if their provider is signed up to a code of practice or redress scheme, or is regulated by an official body.

Arron Dickens is a Credit Analyst at checkmyfile and has a Bachelor of Arts degree in Business Administration and is an Associate of the Institute of Credit Management. He can be contacted at arron.dickens@checkmyfile.com.

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