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OFT to investigate three ‘quick house sale’ firms

Joanna Faith
Written By:
Joanna Faith
Posted:
Updated:
07/08/2013

The Office of Fair Trading (OFT) has opened formal investigations into three “quick house sale” firms that promise to sell properties for struggling homeowners.

Quick sale firms offer consumers a faster sale than might be achieved on the open market, with the seller usually agreeing to receive a below market value price for their home in return.

Sellers typically forgo between 10% and 25% of the market value of the property.

Some sales are completed in as little as seven days.

An OFT report found that quick house sale firms can be beneficial to consumers who need a “fast, hassle-free sale”.

However, the regulator also found that some firms were preventing customers from making informed choices when selling their home, and exploiting their difficult financial circumstances by:

• Reducing the price offered at the last minute after the seller is financially committed to the transaction.
• Making misleading claims about the value of the property or level of discount to be applied.
• Stressing the fastest possible times to completion (for example ‘seven days’), rather than the more typical times (three to four weeks) on websites and marketing materials.
• Inducing sellers to sign long-term exclusivity agreements that prevent them selling to other buyers, with severe penalties for breach of contract.

The report revealed that 70% of complaints received about quick house sales came from vulnerable consumers, for example older people who wanted to sell their property quickly due to declining health, and homeowners in financial difficulty looking for a quick sale to help reduce their debts.

Gaucho Rasmussen, OFT director, said:”Responsible quick house sale firms offer a valuable service to consumers who want a fast sale. However we have also seen potentially illegal behaviour and as a result the OFT has opened investigations into three companies.

“When sellers get a bad deal, they could lose a lot of money. We want to ensure that consumers can have confidence in this sector and put an end to these shoddy practices.”

The three firms under investigation have yet to be named.


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