Selling your house to a company

Selling your house can be a burden at the best of times and even tougher when the market slows down.

Wouldn’t it be great if there were companies out there who could just buy your house from you directly without you having to bother with agents, viewings, offers and all of the other tedium that a traditional sale entails?

Well actually such companies do exist, they can even purchase your property in just a few weeks.

Read on and the guru explains all about selling your house to a company.

When would you need to sell your house to a company

House buying companies are a great solution to specific property problems. For example if you need to sell your property fast to release the cash and pay your way out of financial difficulties but contrary to popular belief that is not the only reason to use such companies.

Other common reasons to use a house buying service are as follows;

Chain Repair – if your open market house sale has fallen through and you need a quick solution to secure your ongoing purchase a house buying service can be a life saver.

Property issues – if you have issues with the property that would put most buyers off such as; subsidence, Japanese knotweed, foam loft insulation, a septic tank, damp, asbestos.

Leasehold issues – if you are looking to sell a leasehold property but have issues such as; a short lease, doubling ground rent, high service charges, a high rise apartment.

Unwanted second property – If you have a second property that you are losing money on for example a tenanted property that is no longer profitable.

Inheritance – If you have inherited a property and want access to the cash quickly.

Part exchange – If you have found your dream new build and can’t afford to wait to sell your house on the open market.

Emigrating – If you are relocating to another country for work or other reasons.

Stopping repossession – If you can no longer afford to live in the property and need to secure a quick sale rather than let it get repossessed by the bank.

Illness – If you are suffering from an illness and need to use the equity tied up in your home to pay your expenses.

Downsizing – If you are living in a house that is now too big for you and you want to downsize without the hassle of selling on the open market.

The problems with a traditional house sale

The main reason that people turn to a house buying company to purchase their property is the speed at which they can complete on the sale.

Generally a house buying company can buy a freehold house in 2 to 3 weeks. It may take a little longer if you are selling a leasehold property or if the property has any major issues but in either of these cases a house buying company will always be significantly quicker than selling on the open market.

Another reason that people turn to house buying companies is if the property has any issues that would put off the majority of buyers, such as subsidence. Any issues that make a property unmortgageable, meaning that a potential buyer won’t be able to secure a mortgage from a lender, is a major problem when it comes to selling on the open market. You may have seen these properties advertised as ‘cash buyer only’, these houses can take significantly longer to sell, if they sell at all. Not an ideal situation if you are looking to move on with your life.

This brings us on to another reason people turn to house buying companies, they offer certainty. Unlike marketing and selling your house through an estate agent, which isn’t really certain until the day of completion, buyers can get cold feet and pull out at any moment leaving you back at square one. Having a guaranteed offer from a company can give you the assurance you need to make plans with confidence.

the problem with a traditional house sale

Sell your house to a company

Can you afford to wait for your house to sell? Will it even sell on the open market?

By far the fastest and most certain way to sell your house is through a house buying service.

Also known as cash house buyers these ‘quick sale’ companies will buy your house, regardless of condition and can complete the sale in a few weeks.

Speed is the obvious main benefit of this service, compared to a traditional sale which can take months, but there are also other benefits;

Having a guaranteed sale with a set timeframe frees you from the burden of uncertainty, knowing that your house is sold gives you the peace of mind to plan your future with confidence.
There are no costs to pay. All other methods of selling your house come with their own costs that you will need to pay out of your own pocket at some point. With a house buying service all of the costs are covered in the sale price so you never have to pay a penny.

Of course there is a drawback and that is the sale price. The trade off for a fast sale is having to accept a lower offer. If there are no major issues with the property this price will be around 80% of what your property would sell for on the open market in around 6 months.

So although the proverb “you can’t buy time” turns out to be false, it does come at a cost. However when you factor in the sales and holding costs of a traditional house sale it might not be as costly as you first think.

So, if you need to get moving fast, is the price really too much to pay?

The problem is actually choosing the right company to use. Unlike other areas of property sales, such as estate agents, the quick sale sector isn’t regulated so there are many rogue operators in the market looking to take you for a ride. These bad eggs are not easy to spot, on the face of it they look the same as the reputable companies, they say the same things and even have large marketing budgets to make it seem like they are the real deal.

So if finding the right company is like trying to find a needle in a large pile of needles, how do you go about choosing the best house buying company to use?

You could spend hours of your life doing diligent research on each and every one of the hundreds of companies out there, but do you really have time for that?

Fortunately the Cash house buyer guru has dedicated his life to separating the wheat from the chaff, fanatically investigating dozens of house buying companies and analysing their practices so you can make an informed decision. You can find the list of top rated house buyers by clicking the button below.

Advantages of selling your house to a company

Speed

As discussed the main advantages of selling your house to a company are speed and certainly. There are also other advantages such as no upfront costs, in fact there are no costs at all. A reputable house buying company will cover all of your legal fees, they will pay for the survey and, unlike estate agents who charge a fee, they don’t charge for their service since they make their money by buying the property at a reduced price.

No Costs

There are other cost savings to consider as well. If your house sale takes 12 months to complete with a private buyer that is 12 months of costs that you have to pay on the property such as mortgage payments, council tax, energy bills, insurance and other day to day expenses. These add up to a significant amount over a prolonged period of time, selling to a company in a matter of weeks can cut out this extra burden.

Expertise

Another advantage is that house buying companies are experts in purchasing properties, it is their job after all, this means that if any issues arise during the conveyancing they have the knowledge and experience to resolve them quickly and efficiently. Issues that would likely derail a sale to a private individual aren’t going to phase a company they will simply resolve the issue and continue with the purchase full steam ahead.

Additional Services

Many house buying companies will also be able to organise additional services such as removals. This can not only save time the costs can often be taken from the sale price so you don’t have to pay anything out.

Disadvantages of selling your house to a company

The only real disadvantage of selling to a house buying company is the amount of money that you receive for your property. Professional house buying companies look to pay around 80% of what the property is worth if it were to be sold on the open market. There are a few exceptional circumstances where they can offer a few percent more but in general this is what you can look to expect. If any company makes an offer for your house at a higher percentage than this then it is likely that they are either not planning on purchasing it themselves and are just going to try to sell it in the background or they are going to reduce their offer later down the line, usually at the 11th hour.

Further reading: how much can house buyers actually pay

This brings us to another disadvantage, not really of selling your house to a company but more of a disadvantage of the industry in general. The house buying sector, unlike estate agents, is not regulated, this can mean that there is a vast chasm of difference between the service you can receive from the reputable companies and the wolves in sheeps clothing that are pretending to be.

We have reviewed the top house buying companies to help guide people to using the reputable companies so they don’t get caught out by the scams used by the rogue ones. You can read more about some of the tactics used by the disreputable companies in our article below.

Further reading: Shady tactics used by disreputable house buying companies

Or you can skip straight to our list of top rated house buyers by clicking the button below.

What are house buying companies

House buying companies, also known as ‘quick sale’ or ‘we buy any house’ companies occupy a rather niche area of the property market. They are set up to purchase properties in a much faster timeframe than could be achieved through a traditional property sale. In exchange for this they purchase the property at a reduced price sometimes referred to as below market value.

These companies then look to make a profit on the properties they buy. In the majority of cases this is by reselling the property on the open market for its full value. Some will hold on to the properties as rentals but this is much less common due to the way that the purchases are often financed.

Although often referred to as ‘cash buyers’, ‘cash buying companies’ or ‘cash house buyers’ the majority of them aren’t actually using their own cash funds and will either be using an investment fund or bridging loans to finance their purchases. This doesn’t mean that they will be waiting around for lender approval like a mortgage buyer though as all of the top companies will already have these vehicles in place so they can draw down the funds as and when they need the to facilitate a fast sale.

Who are the best house buying companies

This will to some extent be based on your individual circumstances and references. Although there is seemingly hundreds of house buying companies operating in the market the service you receive can vary greatly.

In fact if you cut out the companies that are acting as lead generators posing as buyers and the ones that have no intention of actually delivering a true house buying service you are just left with a handful of companies.

You can find our list of top rated house buyers along with what to look out for and what makes a good house buying company here.

Dos and Don’t of selling your house to a company

As with any industry there are best practices and things that you should not do when looking to sell your house to a company. After all your property is likely to be your biggest asset and you don’t want to lose it and your shirt in the process.

Dos

Do your due diligence and research any companies thoroughly before reaching out to them.
Ask for proof of funds
Use your own solicitor
Get an independent valuation
Make sure they are registered with the property ombudsman

Don’ts

Don’t sign a contract
Don’t believe offers that are too good to be true

Further Reading: 7 Ways to avoid getting scammed by cash buying companies

How fast can a company buy your house

If you are shopping around in the house buying company industry you will see wild claims from companies that promise they can buy your house in crazy timeframes. The most common is 7 days but some even claim that they can do it in 48 hours or less!

These claims are of course not true, perhaps they could be based on real life situations where circumstances did make such a fast sale possible, the only real common circumstance where this might be the case is with a chain repair where a sale has fallen through and the company can in most cases pick up the conveyancing where it was left off.

Realistically though a cash house buying company can complete a house sale in around 2 – 3 weeks. It is rare that someone actually requires such a fast sale, the average time that people actually want to sell is somewhere in the region of 4 to 5 weeks, this is still a very quick sale when compared to the open market. If you want to learn more about the timeframes involved you can read our article below.

Further Reading: How fast can a cash house buying company actually buy your house

The process of selling your house to a company

The process of selling your house will vary slightly from company to company but in general it will go something like this;

Initial enquiry and first call – you can either submit an enquiry on the companies website or phone them directly. They will then call you and ask questions about the property and around the circumstances of the sale.
Valuation and offer – the company will then carry out a valuation of your property and use this as the basis of what they offer you.
Offer acceptance and survey – If the offer works for you and you accept it the company will then book in a survey.
Conveyancing – Solicitors will be appointed and the purchasing process will begin as soon as you accept the offer.
Sale Completion – the sale will complete on a date of your choice which can generally be as fast as 2 – 3 weeks or anytime after that depending on your circumstances.

Choosing a company to buy your house

The most difficult thing about selling your house to a company is actually finding one that will deliver on their promises and deliver a fast guaranteed sale at a fair price. We have outlined some does and don’ts previously in this article that should help steer you in the right direction but which company you choose is ultimately up to you but there are some things to look out for, for example if the company is a registered member of the national association of property buyers (NAPB) this is a house buying industry self regulatory body and shows that the company is at least registered with the property ombudsman so you have a course of redress if things go wrong. If a company is not a registered member of the NAPB then you know to steer well clear but the bar for registration is low and membership alone doesn’t guarantee that you are speaking to a reputable buyer.

Further Reading: What is the NAPB?

We have our own standards and ideas of what should be best practise in this industry and we will continue to campaign for higher standards and hold companies that don’t deliver on their promises to account. If you want to see who comes out on top in our list of top rated house buyers you can find our list here or by clicking the button below.

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