I have just broken up with my partner of four years, and living together has become extremely difficult.
We own our one-bedroom flat jointly and are looking to sell, but we know that this can often take months. Neither of us is in a position to buy the other out.
Although my ex-boyfriend is keen to sell as soon as possible, he is refusing to leave until the property is sold.
We are both still paying our share of the mortgage and can’t afford to move out and rent at the same time.
Splitting up: Homeowners who have had a relationship break down are often desperate to sell as quickly as possible – but is a ‘quick sale’ company the best route to go down?
In my desperation to be free from this situation, I have found a number of companies online which claim they will buy your home in seven days if you are willing to take a discount on the price.
Although I don’t want to sell the flat for less than we paid, I would be willing to sell it for less than the market value if it meant we were able to move on with our lives as soon as possible.
What is your advice regarding these companies? Are they legitimate and is it worth considering? Via email
Ed Magnus of This is Money replies: Desperate times often see us hunt desperate measures to escape certain situations.
Type ‘sell home quickly’ into Google and a plethora of companies appear promising to buy your home – typically within a week.
The big catch is that you’ll have to accept a discounted price for your home. This is often between 10 and 25 per cent below what you might have received on the open market.
To most, it will seem obscene to consider such a financial sacrifice. However, these companies can appeal to people who need a quick exit.
The CMA’s six red flags
What the Competition and Market Authority warn to watch out for from these ‘quick sale’ firms:
1. Last-minute price reductions
2. Hidden fees
3. False claims about being a cash buyer
4. Claiming to offer 100% of market value
5. Requesting exclusive selling rights to your property
6. Take weeks or even months to buy your property, despite promising a quick sale
This could include a range of situations, including those in the midst of a bad break-up or divorce.
It could also appeal to those struggling to meet mortgage payments, or facing the prospect of their property being repossessed by their mortgage lender.
There is no denying that selling your home can be a long and grueling process.
The average time it takes to sell a property from the first day of marketing to legal completion is currently 178 days, according to Rightmove – that’s almost six months.
It typically takes 36 days for a property to go from being listed for sale to finding a buyer, and then a further 142 days on average to go through the surveying, mortgage approval and legal processes and complete.
The ‘quick sale’ companies will often try to appeal to sellers by telling them that they will not only save time and hassle, but also avoid estate agency fees and legal fees.
However, for all the perks they will claim to offer you, there are plenty of red flags to watch out for.
The Competition and Markets Authority has identified six business practices that home sellers need to watch out for when choosing a quick sale company.
These include subjecting sellers to last-minute price reductions, and tacking on hidden fees just before completion is due.
Some quick sale companies will also claim they pay 100 per cent of the property’s value or close to it – any home seller should be doubly suspicious of their valuation in this scenario.
Quick sale companies will typically offer between 75 and 90 per cent of the property’s market value, and sellers should find out what their home is really worth before agreeing to anything
According to TheAdvisory, a website offering advice and support to home sellers, 97 per cent of these quick sale companies are not ‘genuine’ cash buyers, despite many claiming to be.
The Advisory says the vast majority of these firms are lead generators which sell your personal details and information about the property on to small-time investors.
They may use this promise to trick sellers into signing an option contract, which they use to prevent you from being able to sell elsewhere whilst the buyer or mortgage funding is secured.
To help with your question we spoke to Paula Higgins, founder and chief executive of the HomeOwners Alliance, Gavin Brazg, founder of TheAdvisory, and Henry Pryor, a professional buying agent.
Should she go for a quick sale?
Paula Higgins replies: What a tricky situation. Splitting up is often a stressful and painful event.
While untangling your finances is not easy, it is an important step for you both.
First of all, don’t rush into thinking a quick sale will solve all your difficulties.
It is not in either of your interests to sell at below market rate, as this could seriously impact your finances later if you are keen to buy a home.
Henry Pryor adds: I have come across examples like this one before. Divorcing couples faced with having to share a bedroom or bathroom sometimes want to get out at any cost.
There is nothing fundamentally wrong with the quick sale business model, so long as consumers understand that they are paying for the convenience.
It’s a bit like We Buy Any Car, but for houses.
Moving on: Our reader is keen to move out of the shared property as soon as possible – even if it means she makes less money from the sale (picture posed by model)
What are the other options?
Paula Higgins replies: Take a good look at other options if you find the living situation unbearable.
Have you thought about renting out the property to cover the mortgage and give you both time and space?
And before you contact a quick sale company, do speak to local agents in your area and explain you want a quick sale. They could very well have interested cash buyers on their books.
Selling via an eBay-style online property auction is another way to sell quickly, but be aware that buyers need to pay a hefty reservation fee to the agent which will result in a lower price for you.
If you do consider an auction, make sure you compare the online property sites as they are not all the same.
Walk away immediately if a quick sale firm…
1. Asks for an upfront payment of any kind
2. Asks for any cancellation or withdraw fee within their paperwork
3. Asks you to sign a ‘lock-in contract,’ ‘option agreement’ or ‘RX1’ form
4. Claims to provide a guaranteed sale for close to 100 per cent of the market value
5. Claims it (or the industry) is ‘regulated’ by a government body
6. Claims it can sell your house to investors for more than 90 per cent of its market value
7. Wants to put a ‘restriction’ against the title of your property with HM Land Registry
8. Does not have a clearly visible Company Registration Number on its website
9. Cannot provide ‘proof of cash funds’ upon your request
How to choose a reputable quick sale company
Gavin Brazg replies: You’ll need to sort through the hundreds of websites out there all claiming to be UK’s ‘most trusted’ or ‘most regulated’ or ‘most highly rated’ cash house buying company.
The fact is, almost all of these claims are false. In truth, there are only a handful of reliable and trustworthy cash buying companies in the UK.
The rest are either fake cash buyers, serial ‘price reducers’, or using ‘bait and switch’ techniques to get you tied into an Option Contract – which does not guarantee you a sale.
Walk away immediately if a company either asks for an upfront payment of any kind, or asks for any cancellation or withdrawal fee within their paperwork.
Also walk away if the company asks you to sign a ‘lock-in contract’, ‘option agreement’ or ‘RX1’ form.
A good rule of thumb is that whoever offers the most at the ‘phoning around stage’ usually pays the least when it comes to the ‘handing over the cash stage.’
Paula Higgins adds: If you have exhausted all other options, by all means take a look at quick sale companies.
Read their terms and contract very carefully before you sign so you fully understand your obligations.
Many quick sale companies need to find a third-party buyer, which can take time, or will agree a price with you and then reduce the offer at the last minute.
Read the small print: Experts say anyone considering a quick property sale firm should check the terms and conditions carefully before signing anything
Take a close look at the termination clauses in the contract as you may be liable for fees if you change your mind or sell to someone else.
If you do decide to want to sell quickly, make sure the company is a member of the National Association of Property Buyers.
Its members will buy the properties direct and have signed up to higher standards of service.
Experts’ final verdict on quick sellers
Henry Pryor replies: People do use these firms, and despite whining about how much estate agents charge, there are some people who will take 10 per cent hit just to get a quick deal.
My advice to people thinking of selling this way is to try everything else first.
There is nothing wrong with these firms as such, but you pay for the privilege of getting your money quickly.
In this market – in which buyer demand is exceeding the supply of available homes – that shouldn’t be necessary.
Gavin Brazg replies: For a minority of sellers, using a genuine cash house buying company can provide them with a quick and guaranteed sale.
However, to even consider going down this road, you first need to make peace with the fact none of these companies will likely pay more than 75-80 per cent of an independent RICS (Royal Institute of Chartered Surveyors) valuation survey.
If that hasn’t put you off, then do make sure you pick a trustworthy company.