Despite growing hugely in popularity over the last decade, many people still aren’t really sure what a professional home buyer is.
Here we answer all your questions, including ‘what is a professional home buyer?’ and ‘how can a professional home buyer help me sell my house?’
What is a professional home buyer?
A professional home buyer is a company that has its own cash reserves, enabling them to buy your property, for cash, in as little as 7 days.
How can a professional home buyer help me sell my house?
By being able to offer you a guaranteed cash home sale, a professional home buyer can offer you a secure sale, for a guaranteed price, on a date of your choice.
This enables you to plan both your time and finances accurately. It also effectively makes you a chain-free buyer, giving you great negotiating power for any onward move.
What’s the catch?
There’s no catch, but in exchange for a quick, guaranteed cash house sale a professional home buyer will pay less than market value for your property.
Obviously if the price you achieve for your property is your primary concern this isn’t the right service for you, but if speed, certainty, security and convenience are higher on your list of priorities, or if you’re working to a tight deadline, a professional home buyer can be a great fit!
Are there any professional home buyers that will pay full market value for my property?
In short, no. In order to cover their costs (professional home buyers, along with anyone else buying more than one property, are required to pay an additional 3% stamp duty) and remain a profitable, viable business, professional home buyers need to apply a discount to the offer they make you.
Anyone claiming to be a professional home buyer who offers you more than 90% of the value of your property should invite serious investigation as it’s likely they’re a property broker rather than a genuine professional home buyer.
What is a property broker and how are they different to a professional home buyer?
A professional home buyer will buy your property from you directly, using their own cash. This means they’re able to guarantee the sale, the price they will pay and the timescale.
A broker is someone who will ‘manage’ the sale of your property to an investor. They will make you an offer for your property, but without the cash funds to fulfil that sale.
Instead they will advertise your property to investors and hope they find someone willing to pay the amount they’ve quoted. This means the sale is not guaranteed and they are unable to give any certainty about sale price or timescale.
The other downside of selling to a broker is that they may try to tie you into a contract. These contracts are often referred to as option agreements. Being tied into a contract will mean you’re unable to sell through other channels for a set period of time.
If you’re after more than 90% of the value of your property, you’re better selling with an agent. You will have more control over the sale and achieve the same price (or more!) as you would with a broker.
How can I tell the difference between a professional home buyer and a broker?
Unfortunately there are more than 100 businesses in the UK claiming to be professional home buyers. Of these, only 3 are genuine cash home buyers. The others are brokers.
The easiest way to ensure a professional home buyer is genuine is to research their financial position. Company accounts are freely available to view through websites such as Companies House and DueDil.
A genuine professional home buyer, with the means to buy your property directly, should have more than £1 million in available funds. They should also have an annual turnover in excess of £4 million – a turnover of less than this would suggest that they don’t buy many houses!