OFT to probe ‘quick house sales’
Quick house sale providers offer to buy a house or find a third party buyer very quickly, usually at a discount from the full market value.
The OFT says that while providers may offer a valuable service, it is concerned that some practices might lead to homeowners receiving much less for their property than it is worth.
The OFT is particularly concerned about the risks to people in financial difficulty – including those who have worked up large amounts of debt or are facing repossession.
Cavendish Elithorn, OFT senior director for goods and consumer, said: “Businesses offering quick house sales may provide a useful service for homeowners who need to unlock cash in a hurry.
“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.”
Consumers at risk may also include those who need to sell their property quickly following a relationship breakdown or the elderly, who might need money to pay for their care.
Practices that would give rise to concern include:
• Unclear fee structures, for example imposing an unexpected fee following an encouraging initial valuation, as a condition for progressing the service
• Reducing the price offered at the last minute after someone is financially committed to the transaction
• Making misleading claims about the value of the property or the level of discount to be applied to the sale
• Falsely claiming to be a cash buyer
• Inducing consumers to enter into agreements that prevent them from selling to other buyers, with severe penalties for breach of contract.
The OFT has asked over 50 quick house sale firms to provide information on their business models and practices and would welcome evidence from people with experience of this sector, including valuation experts, estate agents, debt advisers and home owners.
Elithorn added: “We want to hear from anyone who has used a quick house sale provider, whether they have had a good or bad experience with the business.
“We will protect the confidence of anyone who contacts us and their information will be invaluable in helping us to build up a picture of the market and establish whether we need to take action.”