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House buying companies, also referred to as quick home buyers, are businesses that specialise in making fair and fast offers to purchase practically any type of freehold or leasehold house, even those that have structural flaws or other problems that other buyers may view as a dealbreaker. This guide explains how these companies work and what to expect selling this way.
- What exactly are house buying companies?
- Benefits of selling to a property buying company
- Possible problems with selling to a house buying company
- The process for selling to a home buying company
- Alternatives options for selling your house or flat
- Top queries about selling to a property buying company
What exactly are house buying companies?
House buying companies, also often referred to as quick home buyers, are businesses that have the funds available to immediately purchase almost any type of freehold or leasehold home.
As this guide explains, selling to one of these companies can be a streamlined way to find a buyer that avoids many of the delays and complications involved with using an estate agent, trying your with a property auction or selling without any help from a third party. You’ll just deal directly with whichever company you’re using for the sale of your flat or house.
Quick buyers are so called because it usually only takes them a handful of weeks to complete all of the steps required for purchasing a home, as the property advice website Ready Steady Sell notes. And this covers all of the required actions to sell a home, such as the legal process of exchanging contracts.
Keep reading to learn about the various benefits of selling your home to a property buying company, as well as some of the uncommon downsides that might occur.
Benefits of selling to a property buying company
Possible problems with selling to a house buying company
As with almost any industry, there are unfortunately a few potential downsides of selling your property to a home buying company, although worst case scenarios are very rare.
Despite claiming to be able to buy homes quickly, some so-called quick home buying companies might actually take many months to complete the process. They use the promise of buying your property fast as a way to convince you to sell to them, but then the timeline can end up taking as long, or longer, than it would have done when selling via other methods.
Another trick that some of these businesses might use is charging certain fees when buying your property that might be as expensive as commission you would have paid to an estate agent or an auctioneer. These companies will still to be a no-commission business but will still manage to charge sellers through other fees that they do not refer to as commission.
Looking up details of a particular company online is a quick and simple way to find reviews that sellers might have written about the business that could help alert you to any problems.
One way to avoid falling victim to a scam when selling to a home buying company is to only use those business that are registered with The Property Ombudsman (TPO). This is an independent organisation that has a code of conduct for how these companies should operate, and those rules are crafted to shield homeowners against fraud in this industry.
All TPO members must adhere to these regulations, which should give you extra peace of mind with the sale of your house or flat. And it’s very quick, easy and simple to check a company’s membership status – just visit the TPO website, click on the “Find a Member” tab on the left side of the welcome page, type in a company name and then click on search. If a company is registered with the organisation, you will be shown their full membership details.
If you get zero results with the search, then the company is not a TPO member and you should not sell your property to this business because it increases the risks of it being a possible scam.
The process for selling to a home buying company
One of the top reasons why homeowners like to sell to property buying companies is that they offer a stress-free approach that only has a few steps and minimal work for the seller.
Using the quick buyer LDN Properties’ process as an example helps to show just how simple it is to sell this way, particularly when compared to some of the slower and more complex options – such as selling at an auction that has several steps to go through and can take a very long time.
With a house buying company, you start by calling them to ask about selling your property. In less than an hour they should be able to make you an initial offer for buying your home, but there’s no rush to decide as you will have at least a week to think about this offer.
If you like the offer and want to proceed with a sale, the next stage is when one of the company’s representatives will visit your home so that they can inspect the inside and outside before a final offer is made. This is the only viewing that you will need to have when selling this way, compared to potentially dozens or more viewings when selling via an estate agent. That can make a home buying company a great choice for people who are reluctant to have many viewings at their house or flat because they find them inconvenient and invasive.
The home buying company will next make a final offer and if you accept it, they’ll move quickly to work with your solicitor or other legal representative to complete all of the required legal paperwork to finalise the purchase. From start to end it should only take a few short weeks, and in that time you’ll have received the full sale proceeds and contracts will have been exchanged.
Alternatives options for selling your house or flat
If you’re looking to sell your property but you are still unsure about whether or not to sell to a home buying company, it can be useful to learn about your other potential selling choices.
The three usual alternatives to selling to a home buying company are trying your luck with an auction, using the services of an estate agent or selling without any assistance. There are various pros and cons linked to all three of these methods, ranging from a minimal workload for the seller when using an estate agent through to high fees when selling at an auction.
To help with narrowing down the options you can write down your main goals with selling, such as your goal sale price, how long you are willing to wait to find a buyer and whether you will pay any commission. Then compare these important facts against the specifics of the three choices below. This should help you to see whether any of the three alternative methods pair well with your needs, or whether selling to a home buying company is a preferable decision.
Trying your luck with an auction
Auctioning your home is another option – but it’s an uncertain one because you don’t know if anyone will place a bid on your property. If nobody bids on it then it remains unsold and you will need to begin again with trying to find a buyer, which could delay the selling timeline but many more months.
Or you may get just one bid at the reserve price, which is the lowest price at which you agree your house or flat can sell. A bid at this value is considered to be a legally binding sale, and the bidder/buyer could sue you to enforce the sale if you later try to abandon it.
For that reason, you must choose a reserve price that is likely to produce at least some profit from the sale, after deducting the commission that the auctioneer will charge. If you don’t plan accordingly then you risk either breaking even on the sale or possibly selling a loss.
The average auctioneer will charge roughly 2.5 percent of your home’s final auction sale price in commission and this will be subtracted immediately from the eventual sale proceeds, which will increase your expenses. Some auctioneers may be open to lowering their rate of commission or having the winning bidder pay some of your costs, so ask if this might be feasible.
Selling at an auction can be a lengthy process and there will be weeks or longer of waiting after you decide to use this method and before the auction occurs. And if your home sells at the auction, the winning bidder then has about a month to sign tshe required papers and handle all their other mandatory tasks in order to complete the sale, delaying it even further.
You could always ask an auctioneer if they would be open to setting a shorter deadline than a month for the buyer to finish these tasks, which could speed up the process. Just note that some auction houses may give the winning bidder even more than a month.
And an auctioneer could ask if you want to auction via the traditional or modern method. Using the traditional method, the auctioneer will create a listing that describes your home and features photographs of the interior and exterior, and then they’ll advertise this to generate interest from buyers ahead of the auction. They’ll then host the auction and, if your property manages to sell at the reserve price or higher, the auctioneer will oversee the completion of that sale.
With the modern method of auction, the listing will be open to bids 24 hours a day, seven days a week, for a set period of several weeks or months. Once the deadline for the listing expiring arrives, the top bid at that moment is deemed the winner and the person buying your home.
Using the services of an estate agent
If you want a minimal workload when selling your home, an estate agent may be a wise choice because they will do most of the tasks required, including preparing a listing, advertising it online, in their office and in local newspapers, scheduling viewings and hearing offers.
For putting in all of this effort, the typical estate agent will charge you commission on the sale of your home, usually within a range from 1.15 percent to 1.40 percent of the final sale price, although it can be higher or lower than this amount. The fee will be taken out of the eventual selling process immediately, which will add to your total expenses when selling this way.
It’s also not the fastest option available for selling a property because you may be waiting many months or even more than a year before you find a buyer. And someone can make a genuine offer but then change their mind and cancel it, which they can do without any penalties if you have not yet exchanged contracts. This will cause the sale to fall apart and require that you start anew with trying to find a buyer, delaying a sale by possibly many more weeks or months.
And selling with an estate agent can sometimes be stressful, and GetAgent notes that there are even formal dispute procedures that homeowners will sometimes have to pursue if they don’t like something the estate agent has done during the selling process.
For example, one trick an estate agent might try is quoting you a very high price for selling your home even if they know that it will only attract offers at a much lower value. They do this to convince you use their services, so that they can profit from the commission they’ll charge you.
It’s simple to avoid this trap with some easy research – start by asking several estate agents to give you a quote for your home’s possible sale price, then browse online property sales websites and write down the current and past sale prices of homes like yours. Finally calculate the average of all these prices to get a better idea of how much you could get for your home.
Selling without any assistance
Yet another way to sell your flat or house is without any third-party help, which means not enlisting the services of an auctioneer or estate agent to sell your property. But as you’ll see below, there are often far more drawbacks to this selling method than there are benefits.
If you decide to sell your home without any assistance, this means you will need to take care of all the stages involved with finding a buyer, starting with creating a listing and advertising it, then organising viewings and hearing offers. It can quickly take up a lot of your time and become very stressful because of the work involved, particularly if you’ve never sold a home before.
That is why this method of selling is generally only suggested for those people who have experience with finding buyers for properties, or who might have a suitably qualified friend or family member that is willing to help at no cost with trying to sell the property. If not, you may be looking at more than an entire year before you are able to find a buyer for your home.
And someone can make an offer but then rescind it, causing the sale to fall apart and likely extending your selling schedule by many weeks or months, as you’ll have to start over with seeking a buyer. Unfortunately, people are allowed to make serious offers to buy properties but then withdraw them without facing any penalties, so long as contracts are not yet exchanged.
One of the only obvious advantages of selling without any help is that you will not have to pay any commission to an auctioneer or an estate agent, so you can save costs that way. But this saving might be cancelled out by the amount of money that you have to spend on advertising your listing and the other various tasks involved with trying to attract a buyer to your home.
If you want to avoid using an auctioneer or an estate agent but you also think selling on your own would be too much hassle, you should consider getting in touch with LDN Properties or another home buying company. They will not only ensure that you are able to sell without being charged any commission, but you will also get a much faster sale. That’s because these companies typically finalise the process of buying a home within a handful of weeks.
Top queries about selling to a property buying company
As a house buying company, LDN Properties often gets queries from sellers about how we work, and below you’ll see our answers to some of the most frequent questions:
Your top questions when selling to a property buying company
House buying companies are businesses that specialise in making fair and speedy offers to purchase almost any freehold or leasehold home, and they will give you a competitive price regardless of your property’s age, condition, location, shape, size or type. And they’ll still make a fair offer even if the home has structural damage or some other type of problem.
If you are looking to sell your property as quickly as possible, contacting a home buying business can be a great decision because it should only take a handful of weeks to complete the entire process. These companies are also suitable for homeowners who are trying to reduce their selling costs because they will never charge commission when buying a house or flat.
Although scams and other negative issues with home buying businesses are rare, they unfortunately can still occur. One potential problem is that some of these companies may make an offer that is lower than the price you may be able to get selling via other methods. And other businesses may charge fees despite claiming not to charge owners any commission.
Selling this way starts when you call the company to ask about selling your home, and within an hour you should get a tentative offer. If you accept that offer, the company will next have a staff member visit your property to inspect it before they make a final offer. And the last stage is when you accept the final offer and the company works quickly to complete the purchase.
Expect it to take only a handful of weeks when selling your house or flat to a property buying company, and that includes the important steps of exchanging contracts and paying you the full sale proceeds. It’s a much swifter schedule than selling on your own, selling with an estate agent or selling at an auction, which can all take at least several months or more.
Legitimate quick home buyers will never make an owner pay any commission when they purchase a property, which helps with reducing selling expenses. That compares well to selling either at an auction or with an estate agent, which are two situations where you would have to pay fees and these would increase your costs as they’d be deducted from the sale proceeds.
Yes, you can ask individual businesses if they are registered with The Property Ombudsman (TPO). This is a third-party organisation that writes rules to guard owners against fraud in the quick buying industry, and all true TPO members must follow those regulations. You should never sell to a company that cannot prove it belongs to TPO because it may be a scam.
