Experience With The Quick Sale Company
They found a company online who immediately agreed to purchase his property for £255,000 (85% of the £300,000 that the property had been marketed at with the estate agents). This was acceptable so they decided to proceed with the sale. The company sent a contract for them to sign which they did and the sales process started.
Several weeks into the sale the cash house buying company phoned them with a revised offer. They explained that due to a vague reason given as “market conditions” they would have to reduce their offer to £222,000 and sent out a revised contract for this amount. Mr & Mrs Shaw were not happy with the £33,000 drop so they decided to contact some other companies but the offer of £222,000 was still the highest and with time running out they decided to continue with the sale.
The day before the sale was due to complete and with the mortgage deadline looming large Mr & Mrs Shaw received another phone call from the company explaining that they would have to reduce their offer once more. This time they said that they had been speaking to an estate agent that was currently marketing a property across the street. The company said that due to the price of that property (a similar house in much worse condition than Mr & Mrs Shaw’s house) soon to be dropped that they could now only offer £196,000.
Mr & Mrs Shaw now under considerable pressure were faced with a difficult decision, unable at this late stage to start the process again with another company they pleaded with the company and managed to get the amount increased to £202,000. A £53,000 drop on what they had initially agreed.
The End Result
The sale finally completed for £202,000. To add insult to injury the company took a £1000 retention to be paid back if the property was left empty and in good condition, which it was but as of yet, almost 4 weeks after the completed sale, the £1000 has not been returned.
“My wife has been very distraught throughout the whole experience. We are in our late 60’s and the stress of this experience has been horrendous. I would not wish this situation on my worst enemy and I wouldn’t recommend anyone use this company. They are low life cretins who took advantage of our situation”
What Could They Have Done To Avoid This Situation?
When you need a fast sale with a hard deadline it is easy to slip into panic mode and rush into accepting what seems like the “best” offer.
Here it is important to distinguish between the highest offer and the “best” offer. Accepting a lower initial offer with a reputable company can save you the stress and heartache of accepting a higher initial offer from one using sharky business practices.
It is always worth asking yourself the Guru’s golden questions when selling to a cash house buyer. In this instance there are 3 which would have thrown up red flags.
Have you done your due diligence?
“I regretted not doing my due diligence beforehand. I later looked up the company and saw that it had been shut down and reopened about 4 times. If I had known this earlier I would have been more cautious”.
Not spending time researching the company can be a costly mistake, read their reviews, is there evidence that they are reducing offers at the last minute.
For more information on how to check if you are dealing with a reputable company check out our guide here.
Is the offer too good to be true?
In this instance the warning signs were there early on. The quick sale company “valued” the house at the on market price of £300,000 on the phone.
A house buying company will never value a house at the price a property has been marketed at if it has not sold at that price. They also made the initial offer extremely quickly without having time to do any thorough research. This is a sign that a company is making an offer that they have no intention of ever paying.
For more information on how cash house buying companies value your home you can read our guide here.
Another sign was that they offered 85% of the amount that they valued the property at. The company was aware of Mr & Mrs Shaw’s circumstances so they would have known that they wouldn’t qualify for any stamp duty relief. Which is the only way a Cash House Buying company can get to an offer of 85%.
For more information on how much a cash house buying company can offer for your home you can read our guide here.
Are they asking you to sign a contract?
The company that Mr & Mrs Shaw went with sent out a contract after they had made their initial offer. This contract had a clause in it that stated that if they wanted to pull out of the sale they had to pay the company £1000. This is a classic tactic used by disreputable cash house buyers to commit the seller to the sale.
Once this has been signed the company can sit back and wait. Only when the completion date is drawing near, and when it is too late for the seller to pull out, will they come back with a reduced offer.
For more information on why you shouldn’t sign a contract with a cash house buying company you can read our guide here.
Conclusion
Mr & Mrs Shaw had an unfortunate but all too common experience. They had a genuine need for a quick house sale service but in the end paid the price for choosing the wrong company to the tune of over £30,000.
Instead of a convenient, stress-free house sale they ended up distraught, emotionally drained and financially much worse off than they had expected.
The company that they used are members of the NAPB and registered with the Property Ombudsman and although some of the companies practices would be considered against the spirit of the property ombudsman guidelines, none of them are strictly prohibited so seeking redress would be difficult. The best that they can do is leave a review and hope that others don’t fall into the same trap.
If you are considering selling your house via the quick sale route we recommend that you do your due diligence before engaging with any company.
