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Wednesday, 17 July 2013

Consumers being misled over quick house sales, OFT warns

Consumers who want to sell their houses via so-called "quick sale" companies are in danger of being misled, according to the Office of Fair Trading (OFT).
Quick house sale providers offer to buy houses in as little as seven days, but at a discount to the full market value.
The OFT is warning that homeowners may receive much less for their property than it is worth.
"Any losses could be very high," it said.
In some cases such companies agree to buy a house, but then reduce the price at the very last minute.
"Businesses offering quick house sales may provide a useful service for homeowners who need to unlock cash in a hurry," said Cavendish Elithorn of the OFT.
"However, they are often used by consumers in vulnerable situations and therefore we are concerned about the risk of consumers being misled and losing out on large sums of money," he said.
Consumers identified as particularly at risk include those selling after a relationship breakdown, or the elderly who might need the money to pay for long-term care.

False valuations
During an investigation last year, the BBC spoke to two people who were angry at the way they had been treated by quick sale companies.
Malcolm Haywood, from Lincolnshire, wanted to sell his house quickly, and agreed to a sale price of £120,000.
But just before the deal was signed, the company involved, Gateway Homes UK, dropped the price to £80,000.
Pat Hardy, from Teesside, signed a similar deal with Tom Craven Property.
She had agreed a purchase price of £75,000, but the day before the removal men were due to arrive, they lowered the offer to £40,000.
Both companies insisted that the number of complaints amounted to less than 1% of their customers.
The OFT said practices which cause concern include unclear fee structures, reducing the price at the last minute, and wrongly claiming to be a cash buyer.
It also warned about companies making false property valuations, and tying customers into contracts which prevent them selling to other people, should alternative, and more generous offers emerge.
The OFT would now like to hear from anyone who has used a quick sale provider, whether their experience is good or bad.

OFT concerns

• unclear fee structures
• reducing the price at the last minute
• making misleading claims about a property's value
• falsely claiming to be a cash buyer
• exclusive contracts, preventing sales to other buyers


I had the same situation with Gateway Homes, the day before completion I got handed to the "Office Manager" who stated he'd "just received a survey on his desk" stating the valuation was £60k from the agreed - already reduced to £105k.
The valuation had been done months before and they were in no hurry to complete. My guess is that they were marketing the house to their list of investors in order to do a quick flip.

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