Risks to Be Mindful of Selling Through Quick-Sale Online Property Agents
Selling a property can feel like a challenging experience, but sacrificing value for an expedited sale can be a mistake. We often hear from clients who have received marketing promising a sale within seven days or even, in some cases, within 48 hours.
Although a guaranteed sale can be attractive, the reality is that any company promising a deal within such a short timeframe will inevitably expect to pay significantly lower than market value, with little or no recourse if you change your mind.
On average, quick-sale property firms offer up to 75% of the true property value, and the offer of a cash transaction can conceal other risks, such as fewer checks and a lack of legal support.
How Do Quick-Sale Online Property Agents Work?
There are varied business models, but most quick-sale companies have a tried and tested formula, approaching sellers who they perceive will wish to sell as rapidly as possible, potentially because a property has been on the market for some time or because they have spotted a ‘problem’ with the property that suggests it might take longer to sell.
Of course, a skilled local estate agent can provide independent advice and assist with marketing and setting a reasonable listing price to attract interested buyers or advertise a property to a better-suited demographic.
Quick-sale property agents normally purchase the property themselves and ‘flip’ it, sometimes carrying out hasty repairs or redecoration works or simply relisting the property or selling at auction, particularly where a property presents a strong opportunity to add value or use as an investment asset.
We will run through some of the most concerning issues, but the lack of regulatory oversight, in stark contrast to agents within the professional property sector, may mean that the valuations presented are incorrect, and a seller may believe they are getting a good deal, which is anything but.
What Is the Issue With Quick-Sale Property Agents and Firms?
Onto the potential downsides, it is essential you have a full understanding of the nature of the transaction before you make any decisions about the best way to sell your property.
Although some sellers may decide that the reduction in selling price is worthwhile, in many situations, it is not, with some of the most common unethical practices including:
- Unclear fee structures – being offered a seemingly fair value can quickly unravel when the company deducts a range of charges, which may not have been transparent from the outset.
- Lack of regulation – unregulated industries have no consumer protections such as quality standards or an impartial ombudsman to contact if things go wrong.
- Inaccurate valuations – the value you receive is likely to be some way below market value but may be based on a valuation that is simply incorrect or fabricated.
Of course, there may be some quick-sale companies, primarily those specialising in homeowners facing repossession, who are legitimate and choose to register with The National Association of Property Buyers (NAPB) and The Property Ombudsman (TPOS).
However, caution is highly advisable since registration is voluntary. Without these memberships, a seller will not be able to raise a complaint if they have been treated unfairly or challenge any breaches of the TPOS Code of Conduct.
Free Legal Fee Offers From Quick-Sale Property Companies
A further pitfall to be conscious of is an offer to cover your legal fees, which is also something you may find included within mortgage product marketing. Legal costs for a typical property sale amount to roughly £1,000, but free services are rarely worth using.
That is because, where a quick-sale buyer ‘covers the legal costs’, they are, in fact, using their in-house legal advisers, who act on behalf of the business, not in the interests of the seller.
Independent solicitors and conveyancers are hired by their clients. They will be quick to point out problematic contractual clauses, areas of concern, or anything else that they believe might not reflect the intentions or objectives of the seller.
In contrast, a legal adviser provided by an involved party may not offer the clarity, transparency and advice you may expect.
Alternatives to Help Sell Your Property Fast
We appreciate that there are countless reasons you may wish to achieve a speedy sale, but opting for a quick-sale property firm is often not the ideal solution. There are many ways to expedite a sale, whether you need to sell an inherited property, sell a jointly owned residence following a separation, or wish to release funds for other projects.
Our first recommendation is always to contact an estate agent with the appropriate credentials, experience and understanding of the local property market to help you navigate the sales process.
Established agents can make a significant difference in the time it takes to complete a sale due to:
- Local knowledge of the market, potential buyers and demand.
- Marketing to a broader audience with professional, high-quality particulars.
- Organising viewings at the convenience of prospective buyers.
- Advising at the right selling price to achieve a reasonable value while attracting faster bids.
There may be simple, low-cost improvements you can make that create a marked improvement in the curb appeal and impression of the property – from clearing overgrown gardens to decluttering, fixing minor repairs and ensuring the home presents a living space that attracts interest.
It is useful to have an idea of your target buyer, whether a family, professional, retiree or other demographic, since this helps pinpoint those factors that will matter most to them, whether the proximity to excellent schools, a spare room converted into a home office, or well-tended garden areas.
Serious buyers are far more likely to work with a respected estate agent than purchase a property from an online quick-buy firm – so the crucial aspect is how an agent markets and promotes your listing and engages with interested viewers to keep the sale process moving forward.
If you would like more guidance about selling your West Sussex property or the opportunities available to complete the transaction as quickly as possible, please get in touch with Tod Anstee at any time.