You need to be careful about whom you deal with when considering who you will sell your house to. “There are some individuals and cash house buyer organisations and businesses that run house buying scams and who are not everything they claim to be, “We Buy Any House.
It goes without saying that it is a huge financial commitment to sell your property. So you must take the necessary steps to do things correctly and deal only with a reputable property buyer company or organisation.
You can take some simple checks and steps to ensure that you are not scammed or misled by your homebuyer or estate agent.
Which House Sale Scams Should I Look Out For?
Unrealistic High Offers
Among other tricks, we have found out that sometimes the property organisation, individual or company who claims to want to buy your house FAST will make you an unrealistic high bid to get your initial interest. Then, at the last minute or near completion, they will try to reduce the amount they will pay (when you are most vulnerable and need to sell your property quickly or face home repossession)
Are They Real Cash House Buyers?
You should also know that there are only a handful of real cash house buyers operating on the market (one of them is our buyers!), which means that many advertisements on the internet and in your local paper, for example, do not have the financial means to buy your house as quickly as they say they can, or to provide you with the professional service you deserve and demand.
Some consumers pretend to be “genuine cash buyers” who are not and actually operate as sellers of inquiries and “quick selling estate agents” who will pass your inquiry to someone else to deal with. Therefore, negotiating with a genuine cash property buyer does not give you the full benefits. You can always only find this out later on when it is too late in the sales process, and you have decided to sell to them. It is also important to note that it would not take much longer for any Genuine cash buyers to purchase your home because they will need funding, a mortgage or another third party in place to sell your house, which will cause you delays and more trouble.
The Unregulated Sale And Rent Back Scam
Since 30 June 2010, the FSA and now the newly created FCA-Financial Conduct Authority have had to control all businesses and individuals that wish to provide a sale and rent back service. This means that if you want to sell and then rent back your house, you should always deal with a reputable FCA approved Sale and Rent Back firm. You can read more on the FCA website here.
Watch out for the – We Buy Any House – Scams!
The waiting around for your home to be sold can be a long wait indeed. On average, it takes just over three months for a house in the UK to sell, but many vendors find themselves waiting much longer. You may find yourself having to wait a year or more to sell if the market is difficult, or you own a property that’s quite niche.
Be Aware of Wanting A Quick House Sale
The more desperately you feel the need to sell your home, the more vulnerable you become as a seller and the more accessible you’ll be to potential scammers.
Unfortunately, an individual or organisation wishing to take advantage of house sellers’ weaknesses is present in life, where there are huge vulnerabilities. You could become a candidate for a cash house purchasing scam as you wait to sell your home. These scams are aimed at offering to buy your home with a cash payment for the property. They sound amazing superficially, but in reality, they’re a complete nightmare. Here are a few examples of how these scams can take place:
E.G. 1 – The Offer Drop
This scam is especially troublesome, as to begin with, it does not seem like a scam. You’re going to get an offer for your house; it’s likely to be a decent offer that is near enough to be worth considering your asking price.
However, the person or entity that makes the bid does not necessarily plan to purchase your home. Instead, they would use your home, a house-buying service, to offer a service. This scam involves an entity or business promising to find discount rates for buyers; a service for which they would charge a large four-figure fee. So far, so normal, but it’s how this beneficial discount can be obtained that can cost you the seller.
Let’s say they make an offer to you that you consider readily. You’re taking your home off the market, and you start preparing your transfer. You proceed to the point of signing contracts, and then unexpectedly, your ‘buyer’ will declare that they are no longer suitable for the agreed price. They want less to pay. Just a lot less.
In this situation, what should you do? Well, you’ve got two alternatives:
- Since you have already decided to move your home, organised your finances, and so on… you could say no to the lower price.
- Or you can consent because in your preparation you have reached a point where you will not realistically get out of the contract.
It is safe to say that neither is an ideal solution. You have to start the sales process all over again, at best. At worst, you are forced to accept a selling price for your home that is below the market value.
E.G. 2 – The Valuation Scam
A business is offering to purchase your home for cash. Then you read through the offer’s specifics: before buying, the company needs to have the property valued, just to make sure the value they have given is acceptable. “All right…” you think, “I guess that’s pretty reasonable.”
The next move is likely to trigger further concern: the business wants you to use their preferred valuation firm to pay for the valuation. This fee is high; for a regular, valid survey, sometimes double what you will pay. “The business still wants to buy your house, though, and you figure: “If it sells the house, the valuation fee is worth it, right?”
Not entirely. What is going to happen is that the “valuation” is going to be much, far smaller than the initial price asked for. Then you’ll be trapped in the same position as the example of the first scam: you can accept the far-too-low bid or walk away. Once again, you are forced to waste your time and make a high-pressure decision, but worse still, if you cancel the deal, for the “valuation” fee, you have now lost about £500.
Make Sure You Do Some Due Diligence & Carry Out Checks On Your Potential Buyers
You really need to do some due diligence to ensure that you are satisfied with the person or company you are dealing with and to whom you agree to sell your home. At the beginning of your enquiries, some basic checks will provide you with peace of mind that you are dealing with a trustworthy cash buyer and that you are satisfied and assured to continue with the transaction. It is easier to invest the time and effort into screening the buyer now than to have problems later on or to back out of the deal.
8 point buyer checklist
Here is an important checklist of questions you should ask your buyer, and points to consider:
Will they show you evidence of the funds available for your home purchase? Check that they are real buyers with cash.
Will they send you real testimonials from former satisfied customers and reviews?
Have they given an office address and, if you wish to do so, can you make an appointment to see them in person? After a face-face conversation, you will feel more secure.
Are they a part of TPOS (the Land Ombudsman)? (Read here for more)
Are they members of the Property Buyers’ National Association? (Read
here for more)
How long have they been in the business of purchasing property? Do they have the requisite skills to quickly complete the selling of a property within the agreed time scale?
Ask who the managers or business owners are and the persons behind the organisation you are working with. This will assist you in carrying out more due diligence checks on who runs the company. When investigating company identity details such as business ownership, directors and credit reports, the website Duedil.com will assist you. It’s free to register, and all the information you need is easy to access.
Do they have a good image and credibility while testing their customer feedback and testimonials? Is input from former customers accessible for you to access and even talk to previous customers?
Sale & Rent Back?
If you want to sell your home and rent it back, then be mindful of those who provide this service and who are not registered or allowed to do so. Anyone that provides a SARB service that is not licensed with the FCA breaches the law and should be avoided at all costs.
How To Know If The Offer You Received Is Fair?
Having equivalent quotes from other trustworthy buyers makes sense. We recommend that you deal only with buyers who are registered with the Property Buyers’ National Association.
What’s A Realistic Time Frame To Sell My Home?
With our service, your house can be sold and finished in as little as seven days. However, you will find that most customers will be able to work within a time frame that fits your needs.
From this article you will now know that there are many buy any house scams that exist. You should always remember that if something sounds too good to be true then it probably is. Selling your house properly – through an estate agent means you will get a closer figure to your actual market value than you would if you sold through a cash buyer from a poster on a lamppost.
Take a look at our forum if you’ve been a victim of buy my house scams in the UK – post your issue there and someone from our forum team or our community of members will try to point you in the right direction of help for your situation. You can see the rest of our property blog posts here.