House Buyer Bureau Blog
Property Buying Companies VS -Property Auctioneers
For those that need to sell their home fast, achieving this through normal or traditional channels may not be an option. With the average property taking between three and four months to sell, many now turn to either property auctioneers or property buying companies as their preferred method of achieving a quick house sale. With this in mind, let’s take a look at both.
For houses that are unique or need structural or cosmetic work doing, then this is often a good option. Auctions can be a relatively quick way of selling a property and on average take around five to six weeks from being advertised in the catalogue to the day of the sale. The down sides are that many people who attend auctions are seeking a bargain and as a result you’re unlikely to sell for market value and on some occasions your property may not even sell at all.
A reputable property auctioneer will work extremely hard to sell your property from the initial advertising and write ups, through to drafting paperwork and orchestrating the sale on the day. However, this does come at a cost and can be as much as 2.5% plus VAT, so you need to bear this in mind.
Property Purchasing Companies
For those that need a guaranteed cash sale and need it quickly, then seeking a reputable house buying company may well be the preferred option. In many cases a legitimate property company can complete a sale from start to finish in as little as two weeks and in some cases it can be quicker than this. Clearly this is ideal for those people who need to sell as quickly as possible.
Similarly to property auctions the vendor is unlikely to receive the full market value. In fact depending on which company you decide to choose, it can range from between 65-85%. This is because property companies make their money from the re-sale and if they can advertise attractive prices, they have a much better chance of selling. Obviously in order for them to do this, there has to be some profit in it, in the first place.
Either selling through a property auction or through a reputable house buying company may not be for everyone. Indeed, if receiving the best price for your property is your priority rather than time spent on the market, then going through more traditional estate agents channels is undoubtedly a wiser choice.
However for those people who are facing repossession or need to sell because of a self imposed move away from the area, or need to release equity quickly, then property auctions and house purchasing companies offer a way in which you can sell your property quickly and ultimately be able to move forwards again.
Whichever route you choose, it pays to do your homework, know what your property is really worth and above all seek the best option for you.
How Can Houses for Cash Buyers Help You to Avoid Repossession
For many home owners in 2013, being faced with repossession is an all too common theme. As high unemployment, stagnating house prices and sluggish wage increases come together many people are locked into their homes, unable to sell, yet unable to meet mortgage payments. This is where property buying companies come in.
It’s fair to say that there has in the past been a lot of bad press regarding so called 'houses for cash' companies. However they can and often do offer a lifeline to those people who are facing time sensitive housing issues. So how can they help?
They Offer a Guarantee Sale
Although there are a lot of platforms through which you can sell your property such as traditional High Street estate agents, property auction websites and private sale websites, none of these can genuinely offer a guaranteed sale. On the contrary a reputable property buying company will buy your property outright meaning that the sale is guaranteed subject to terms.
For many home owners facing repossession, time is of the essence. Going down the traditional route via an estate agent for example can take on average between three to four months. The problem is that many people in their current position don’t have the luxury of waiting 3 or 4 months for a sale which may or may not occur. An experienced house buying company can often complete in as little as three to four weeks, sometimes in less than two weeks. Thus releasing the equity and putting the cash back into your pocket quickly.
A reputable property purchasing company has the experience to deal with all aspects of your sale and can take care of all the legal paperwork. In addition, as you are dealing with a cash buyer, there isn’t any lengthy property chain to worry about. This means that the whole process can be an all-round, hassle free experience, unlike many other methods of property selling.
Clearly, property buying companies aren’t going to suit everyone and for property owners who have time on their side and can afford to wait until the right buyer comes along, then there are other methods that are more suited. However, for those facing the real and looming fear of repossession, then companies such as these can offer a real life line to those that need to sell as quickly as possible.
Busting the Myths about Quick House Sale Companies
The idea of companies that purchase homes for cash is certainly not a new one. In fact as long as there has been a property market, there’s been property-for-cash business in some form or another. However, over recent years they’ve been given a lot of bad press. It’s fair to say that some of it is justified, but a lot of it isn’t. With this in mind, let’s bust some myths about quick house sale companies.
Myth One – They Prey on the Vulnerable
Generally speaking, people who tend to use property cash buying companies are those who are facing time sensitive issues. This often means vulnerable people. Those who are facing repossession orders or need to sell quickly in order to release up some cash equity, simply don’t have the luxury of being able to market their properties through estate agents, private sales or even online home auctions. Instead they need a guaranteed property sale and they need it fast. This being the case, houses for cash companies offer the vendor a unique opportunity to buy their house outright for cash. For many this is seen as the lifeline that they need so that they can move forwards.
Before any deal is done any reputable company will make sure that the vendor knows exactly how the sale is to proceed, how much is being paid and is kept informed every step of the way. The reality is that in most cases the vendor is in control and can pull out of the transaction at any time before the deeds are signed over.
Myth Two – It’s a Rip Off
Like any other business, houses for cash companies have to be able to turn a profit. They do this by making money on the re-sale of a property. As a result, they can’t offer the full market value of the property and vendors should in fact be very wary of any company that tells you that it does. Although it varies, most companies tend to offer somewhere between 65 and 85% of the market value. When you take into account that you won’t have to pay for estate agents fees, selling fees or the fact that you may have to drop your price considerably on the open market by as much as 20% to receive a quick sale, then it could be considered relative.
In general, if a vendor is more concerned with receiving the absolute maximum price for their property and aren’t necessarily worried about time spent on the market achieving this, then they are unlikely to need the services of a property buying company anyway.
Myth 3 – They’ve got a Bad Reputation
Like any business, there are a selection of companies who pass themselves off as property buying companies who give the whole industry a bad name. The reality is that like any service, it’s up to the individual to make sure that they hire the right company. Ask for references, check out testimonials and don’t be afraid to ask any questions. A reputable company will only be too happy to provide this type of information.
Has The Funding For Lending Scheme Really Helped The UK Property Market?
In a last ditch attempt to try and ease the freeze on mortgage lending, at the back end of last year the government in conjunction with the Bank of England, launched its Funding for Lending Scheme. The FLS involves offering so called cheap money to the tune of £60 billion to banks and building societies, so that they can in turn lend it out to those looking to get on to the property ladder or to businesses looking for capital. But the question is, has the FLS really helped the UK property market?
Caution is Still the Name of the Game
There is some evidence that in the last six months, more mortgage lenders are entering the 85-90% market, which means less of a deposit (only 10% in some cases) for potential home owners. However the banks and building societies are still extremely cautious and as a result are still only lending to the most credit worthy customers.
Rise in Repossessions
For many, irrespective of the UK Government’s Funding for Lending, it remains the same situation, as falling house prices have eroded any equity they had in their home. This effectively ties them in to their property like a millstone. Add to this the fact that increased wages simply aren’t going up in line with inflation and the result is that many are still finding it hard to keep up with mortgage payments. Because of this, the amount of people facing repossession is also on the rise.
Turning to Alternative Methods
For home owners, being in this precarious situation can be extremely stressful, especially when time is against them. The need to sell up in order to release much needed equity can be pressing. With traditional house selling methods taking on average three to four months to go through, home owners are turning to other methods. As a result more and more houses at auction are being sold because of the pressing need to make a quick sale.
In addition there are a growing number of house buying companies who will pay cash for your home. Obviously this isn’t going to be for everyone, but for those facing challenging time sensitive issues, then dealing with a reputable company could well be the lifeline that they need.
Increase in House Buying Companies
The benefits of dealing with a houses for cash company is that the vendor has a guaranteed cash buyer which they might not get with any other method (even at auction). There is no lengthy property chain to worry about and in some instances sales can be completed from start to finish in as little as two weeks if necessary.
In essence, the government are clearly committed to kick starting the property market, but it is proving a lot more difficult than first thought and the FLS only highlights this further.
Why are House Buying Companies on the Increase in 2013?
According to recent figures released by Halifax, the average house price across the UK stands at £163, 943. This is around £35,000 less than they were back in the heyday of 2007. In addition, although the rate of inflation is now dropping, it still doesn’t fall in line with the vast majority of meagre wage increases. Ultimately, this means that many unfortunate people are in homes that they can no longer afford. Add to this a situation whereby selling your house now takes an average of 3- 4 months at best, and it becomes easy to see why repossessions are on the increase.
For those that have exhausted all options open to them and are staring down the barrel of a repossession order, then more and more are turning to house buying companies in order to release some much needed equity. For this reason, house buying companies are on the increase.
Like any industry, there are a few unscrupulous companies who will take advantage of individuals and as such, they have in the past given the industry a bad name. However, for many who are facing time sensitive selling issues and simply cannot afford to go down the traditional channels of selling a property then they could be considered a blessing in disguise.
Other avenues of property selling such as house auctions, UK property portals and private sales are obvious alternatives to traditional estate agents but they all have one thing in common, sales are not guaranteed.
On the other hand a reputable house buying company will pay cold hard cash for your property. This means a guaranteed speedy sale with no chain. In many cases sales can be completed in as little as 10 days – 2 weeks.
So What’s in it for the Property Companies?
Like any business, property buying companies need to turn a profit. They do this by making money on the re-sale. In many cases they can advertise the property at a competitive price and as a result often attract first time buyers and young professionals who wouldn’t have ordinarily gotten onto the property ladder. Therefore, in their own way they are helping to kick start the economy.
In order to achieve this, the property company cannot buy your house at full market value. In most cases it’s around 65-85% of the realistic asking price. This is inevitably the trade off and this is where many assume that people are being ripped off. The reality however is different. For those who are desperate to release equity in their property because of looming repossessions, divorce settlements, emigration or relocation, and simply cannot afford to go through the hassle and time consuming uncertainty that more traditional methods of house selling bring, then property buying companies are very often the ideal solution.
As we’re a long way from coming out of the recession, more and more home buying companies are likely to spring up.
What Should You Do When Faced With Mortgage Payment Difficulties?
For many home owners, struggling to pay a mortgage is an all too common occurrence. In fact recent figures carried out by Standard and Poor’s predict that by the end of this year (2013) 39,000 home owners will be facing repossession. This is up by around 4,000 from 35,000 last year. Falling or stagnating house prices, high unemployment and sluggish wage increases are to blame.
That being said, what should you do when you’re faced with mortgage payment difficulties?
Contact your Mortgage Lender
The very first thing to do is to contact your mortgage lender straight away and make them aware of the situation. Many mortgage companies have introduced a plethora of initiatives to try to keep people in their homes. Initiatives such as payment holidays might work for temporary financial problems. However if the issues are more long term, then the mortgage company may look at re-evaluating and extending the terms of the contract.
Work Out What you can Afford to Pay
Try to pre-empt the mortgage company and work out what you can realistically afford to pay. If you can present a detailed proposal of how much you can pay and over what period, then there is a better chance of working something out.
Look into Selling Up
If you cannot agree terms with your mortgage company and time isn’t on your side then you may want to consider selling up. Clearly this should be treated as a last resort, however it may release any much needed equity left in your property before you are faced with any possible repossession orders. This being the case, there are several options you may want to consider.
Firstly you may want to sell on the open market through a traditional high street estate agent. The upsides of this are that if your house is pitched at the right price a good estate agent can generate a lot of interest, and not only this, may already have a slew of potential buyers on their books. However the downsides are that it can take three to four months on average to sell a property and even then there is no guarantee of a sale.
Selling your property via auction can be beneficial in the way that the time frame from your property being advertised, through to the day of the sale is often around five weeks. Given this, it’s a much quicker method of sale. However, people who frequent property auctions are generally after a bargain and therefore, you may not get as much for your property as you can on the open market.
House Purchasing Companies
Another option is to seek the services of a reputable house buying company. The right company will offer you cash for your property which means a guaranteed sale and no property chain. In addition sales can be completed within four weeks, sometimes as little as two weeks. The downsides are that they can only offer you somewhere between 65 and 85% of the market value of your property. However, often those who are facing real time sensitive housing issues may see it as a way to unlock the debt that their property brings, so that they can move on with their lives.
The thing to remember is that when faced with mortgage payment problems, there are steps that you can take. It’s far better to do something than to do nothing at all, as this will only make matters worse.
Four Steps to Take to Sell your House Quickly
If you are putting your property up for sale, the worst thing that you can do is to enter into it blindly. Simply crossing your fingers and hoping for the best, or sitting back and waiting for that all elusive cash buyer is only going to see your property stay on the market for much longer than is necessary. The bottom line is that it’s still possible to make a quick sale even in a slow market, provided you do your homework first and are thoroughly prepared for all eventualities. With this in mind, here are some pointers you may want to follow.
Know Your Worth
If you don’t want your property to hang around once it goes on the market, then it needs to be priced attractively and this means knowing your worth. Do some research and have a good understanding of exactly how much similar houses in your area have sold for. If a similar house has recently sold on your very street, then that’s even better. If you have estate agents round to value, you’ll find that there may be a large fluctuation in valuations. This being the case, always take the average price, based as near to your own evaluations as possible. This will give you a truer value based on what you can realistically sell it for.
Make it Attractive to Buyers
We’re not talking about painting your home and maintaining curb appeal, although these things are important too. Instead, try dropping the price to around 10% below current market value. Although this sounds a little drastic at first, you may want to weigh up whether this is an economically viable option as opposed to the cost of having your property stagnating on the market for months on end. Studies have shown that those people who are prepared to drop their price by just 10% below the current market value, will be looking to sell their house in weeks rather than months.
Exploring all Options
As well as the traditional estate agent, you may want to look at other avenues in which you can sell your house. For instance house auctions, online property platforms and property purchasing companies are all options that you may want to consider, especially if time is of the essence.
When You’re Really up Against it
If the need to sell your house quickly far outweighs the need to get the top price, then you might want to think about a property buying company. A reputable company will offer you a guaranteed cash sale that can be completed in as little as two weeks. This is often a godsend for those facing repossession or the need to move because of relocation commitments, or simply need to release the equity in their property quickly.
Whatever you decide, remember if you take the right steps, your property doesn’t have to be on the market forever. In fact you could be selling up and moving quicker than you think.
Word of Mouth and Recommendations
There’s nothing that endorses a company better than recommendations or words of mouth. Ask around amongst friends and see what comes back. In addition, visit forums and see who is saying what about which company. This may seem like a lot of work, but you’re letting someone deal with what is probably your biggest investment, so you really need to be dealing with a reputable company.
Genuine companies have to display their registration number by law. This is generally found on the company website. This being the case, then run the name through the website at Company House and see what results come up. If the company is nonexistent or the number simply doesn’t match, then avoid dealing with them.
Visible Codes of Practice
Any reputable company worth their salt will have a code of practice upon which they base all transactions. Are these codes of practice clearly visible and easily readable on the website? Any firm that seems reluctant to tie down their terms of business into a simple code may well have something to hide.
Are they Charging for Consultations?
Any trustworthy property buying company should not, and will not, charge you for consultations.
By following this information and avoiding the pitfalls, it is possible to find the right company to help you with your house sale. Remember a bit of detective work before hand is lightly to save a lot of heartache further down the line.
Definite Cash Buyer
The one thing that a reputable house buying company brings to the table is their ability to pay cold hard cash for your home. Rather than have to wait for a possible vendor’s mortgage to be accepted before proceeding, a cash buyer means a guaranteed house sale.
No Property Chain
How many of you have been caught up in a lengthy property chain? At best it can take forever not to mention being pretty stressful in the meantime. At worst your house sale can fall through at the last minute. Selling your home with a property buying company means no chain.
In many cases a sale using a house purchase company can go through from start to finish in as little as a couple of weeks. This is ideal for people who are in a time sensitive situation and need that all-important quick sale.
So what about the downsides to using a house buying company?
You Won’t get Full Asking Price
Property buying companies have to make a profit too and they do this through re-sale. As a result a vendor should expect to receive somewhere between 60-80% of the true market value of their home. Therefore anyone going down this route would have to balance the advantages of a stress free quick sale, against selling their property at a discount. The best advice is to know the true market value of your property before you enter into any negotiations.
In any business, you’ll find those who give an industry a bad name and this is true of property buying companies. They have been given some bad press over recent years due to the antics of some. However, there are a number of reputable companies that have been operating for many years, so make sure you always ask for references and get acquainted with the procedure before you enter into any deal.
Is a house buying company suitable for you? In essence, if you don’t have to sell quickly and are prepared to bide time until a suitable buyer comes along then there are other methods that are probably more suitable . However if time is not on your side and you need to sell your property quickly then you really may want to consider going down the road of speaking to a reputable house buying company first.
Time VS Price - How House Buying Companies Can Help
According to the latest reports by Home Track, properties in London and the surrounding areas are taking on average around 4.9 weeks to sell. Whereas, in some northern regions that figure is close to 12 weeks. Home Track suggest that across the UK the average figure is somewhere around an average of 9.5 weeks. This isn’t very good news for those who are facing time sensitive property challenges. Time VS Pricing
According to the National Association of Estate Agents, in 2013 it really is a case of time VS pricing. For those who want to achieve the highest realistic price for their property and are prepared to bide their time until the right buyer appears then getting the right price is achievable in this market. On the other hand for those who don’t have time on their side and need to sell quickly then they may need to attract bargain hunters. This means dropping the price 10% below the street value of similar houses. For a really quick sale then that figure may have to be increased to 15-20%.
For any person facing time sensitive issues, such as those who are looking to relocate or emigrate, those who need to release equity quickly, or those that are selling as part of a settlement through divorce, or a death in the family, then there are ways in which you can speed up the process. Auction houses, UK online property portals and private sales provide platforms for selling your property. However all of the above can be risky strategies and none delivers a guaranteed sale. So What’s the Alternative?
An alternative solution could be through using the services of a property buying company. In essence they purchase property for cash. Because they have the ability to buy your house for cash, this means:
A Word of Warning
- No waiting on mortgages to be approved
- No property chain
- A speedy and guaranteed sale
If it all sounds too good to be true, then you may want to look a little further into it before you jump in with both feet. Reputable property buying companies have to turn a profit too and this means selling your house on for more than they paid for it. For this reason, they can’t offer you the full market value. Instead it may be somewhere between 65% and 85% depending upon which company you choose. If this is bad news then you may want to look at it this way.
If price isn’t your driving factor and you were already prepared to drop your sale price to attract a bargain hunter on the open market, then the reality is that this is no different. The only thing is that you get a guaranteed cash buyer who may be able to complete the exchange in as little as 10 days to 2 weeks. In some cases it may even be less.
So there you have it. Clearly house buying companies aren’t going to be for everyone, but for those who are in stressful time sensitive situations, they offer solid and reliable service. Especially for those where time is no longer on their side.