Quick Sale

Selling houses is a time consuming process.

Even if things go well it can drag on. This is because a prospective purchasers needs to check that you actually own the land that you are trying to sell, they also need to get a survey to check the property is not about to fall down. Finally they need to somehow get the money to pay for this; normally this is via a mortgage(in which case they need to prove to the mortgage company they have the ability to repay) or by selling another property.

As we live in a Wonga era where people can get access to money instantly it is not surprising that firms have emerged that offer to unlock the equity in a property quickly. This is done by firms which offer to buy houses at a steep discount(10%-25%), they provide the money within a week or so and take the risk in selling the house on.

These firms offer a useful albeit rather niche service. I struggle to see why someone would be prepared to pay tens of thousands to save themselves a few weeks of stress or to get money quickly. But I guess there are some cases where this is valid or necessary.

The other option for a quick sale is via an auction. After an auction the funds have to be transferred with 28 days and a ten percent deposit paid at the time of the auction. The problem with auctions is that a limited supply of cash buyers means properties can go cheaply. It tends to be something that happens more with commercial or development properties, rather than residential properties. Repossessed properties are often sold via auctions as well, as the quick sale element ensures interest does not keep adding to the debt and mortgage companies have a duty to obtain the best price(an auction price is the highest available on the day).

The quick sale properties are being investigated by the OFT. It is an area which is probably under-regulated(a bit like Wonga) and where there is a degree of ignorance and desperation by sellers that could be exploited. The problems seem to mostly be that the companies suddenly drop the value they are prepared to offer, or that not much is put in writing. I suspect we will end up with a code of best practise being introduced.