An overview of the OFTs ruling on quick house sale companies

This month, the Office of Fair Trading published its study into the quick home sale industry.

Whilst being useful for consumers looking at the industry, the report (as is often the way) and its recommendations are not laid out particularly comprehensibly. In order to help consumers, Quick Move Now has explained the important points below and demonstrated how it operates in relation to each one.

Quick Move Now takes every precaution to ensure that we not only comply with the law, but comply with the highest ethical standards. Unfortunately, there are many firms in the industry that are not so diligent and so in order to protect consumers, we’ve included our key tips designed to highlight any risks based on the four problematic areas highlighted by the report:

Offer prices changing

  • The issue: Sometimes home sellers are given an offer, and this is then reduced at a late stage in the proceedings, leading to pressure on them to accept the reduced offer or miss out on the sale. The reason given for this reduction is often ‘adverse survey result’ but sometimes no proof or further information is given.
  • How to protect yourself: Be aware that if a survey highlights problems with a property, its value will be lower than expected, and therefore the amount that the quick sale company will be able to pay for it will legitimately be less than originally thought. This is the only stage in proceedings that an offer should change, it should be fully explained to you at the start of the process, and it should be backed up with a copy of the survey showing just what the problems are. Ensure you ask to see a copy of the survey and while we don’t recommend signing ANY exclusivity agreements, the very least you should do is wait until you’ve had your offer confirmed after survey before entering into one.
  • Legal position: Offers will always be made subject to survey and so reductions or pulling out of the sale can always occur, in the same way that any buyer may choose to withdraw an offer or pull out of a house sale transaction until the exchange of contracts. Buyers are required by the Consumer Protection Regulations to provide consumers with material information that allows the average consumer to make an informed decision and so in certain circumstances, failure to provide reasons for the reduction may be a breach of this. Therefore, ensure you see a copy of the survey before accepting a down-valuation.
  • What we do at Quick Move Now: We cannot purchase a property that is un-mortgeageable, so if any issues are highlighted at survey that would cause this to happen, we may have to pull out of the sale or revise our offer downwards by the proportion that the property value has been reduced by according to the surveyor. Adverse surveys are unavoidable and do occasionally happen. That is why we bear the expense of all surveys so that in the rare case that there is a reduction, the home seller is not placed at a detriment. We also always share full details of the survey with the vendor.

The speed of the service

  • The issue: Providers tend to stress the fastest possible times to completion rather than their more typical times. Few explain factors that may lengthen timescales and some companies require home sellers to sign in to long-term exclusivity agreements.
  • How to protect yourself: Take some time to research the process and the credentials of the company you are looking to use. Treat marketing claims with caution and most importantly ask lots of questions! Get written confirmation of realistic timescales and past examples and do NOT sign any option agreements.
  • Legal position: If the process is taking longer than promised, you are entitled, at any time before the exchange of contracts, to withdraw from the sale. Providers are also required not to mislead consumers under the CPR’s.
  • What we do at Quick Move Now: We always quote realistic times for completion and we have cash funds available, so when we say we can complete in seven days, you know it’s a genuine promise. At acceptance, we will agree a target completion date for our solicitors to work towards and explain clearly the factors that may lengthen the process if there are any.

The identity of the buyer

  • The issue: Not all providers are clear about who is actually purchasing the property. Do they buy it themselves or do they use investors? If they need to find investors, this immediately places risk on the timescale of the completion.
  • How to protect yourself: Ask plenty of questions and ask to see proof about who the actual buyer is and avoid companies who are not purchasing themselves. Obtain confirmation in writing as that way, if it is found later to be untrue, you have a good case for a misrepresentation. You can also ask for proof of funds from the company’s solicitor, which a genuine cash buying company will be able to provide within 48 hours.
  • Legal position: If you were incorrectly informed of who the buyer would be prior to any contract being signed, you may be entitled to seek legal action under a misrepresentation. Under the CPR’s, providers are also required not to mislead consumers but this would not allow for the same levels of reparations as misrepresentations.
  • What we do at Quick Move Now: We always purchase properties ourselves and never use outside investors.

How the purchase will be financed

  • The issue: Not all providers are clear about their financial position. Does the buyer have cash funds available or do they have to raise finance first?
  • How to protect yourself: Research any company prior to entering into a commitment. Ensure that you ask whether they are cash buyers and obtain clarification of this in writing. Check their record at Companies House. If their turnover is too low to enter records, or is too small to realistically demonstrate that they purchase properties outright, then it is likely they are not a genuine cash buyer.
  • Legal position: If the buyer has indicated that they are cash buyers when they are in fact not, then you may be able to seek legal action for a misrepresentation which would allow you to rescind any contract and also seek damages. Providers are also required under the CPR’s to not mislead consumers.
  • What we do at Quick Move Now: We always purchase with our own cash funds and never have to raise finance.

Quick Move Now is the UK’s leading home buyer, offering a quick, secure and hassle-free house sale. Our experienced team, efficient processes and substantial cash reserves enable us to make immediate purchases, so you can sell your house quickly and move on with your life.

Quick: We buy property fast. Funds can be with your solicitor within 24 hours. Timescales are flexible and set by you, but we can complete within seven days if necessary.

Secure: Our formal offer is guaranteed as the company holds cash reserves, meaning funds are always instantly available. We buy direct from you and don’t rely on third party investors or mortgages.

Hassle-free: We take away the anxiety, delays and hassles of selling; no more viewings, negotiations or worrying about sales falling through. Your dedicated purchasing manager will support you through the sale and will ensure your timescales are met.

Supportive: The friendly team at Quick Move Now fully supports customers throughout the selling process, taking the difficulty and stress out of the situation.

Professional: Having helped over 4,500 people in a variety of situations since 1998, our knowledgeable staff and efficient legal and conveyancing processes enable us to offer an extremely fast, simple home buying service.

Reliable: We pride ourselves on our transparency and our no cost or obligation offers are based on two local, independent estate agent valuations. We always call when we say we will, we never drop out of a sale and we will never let you down!

DISCLAIMER: Any advice given in this article is the opinion of Quick Move Now and advice should be sought from a legal professional.

This content was written by Quick Move Now
Published on 2nd September 2013
Last updated on 20th April 2017

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