Home Seller Warning – Don’t Fall for Fake Cash Buyers

10 August 2018

The National Association of Property Buyers (NAPB) promotes the best practice in the property buying sector and members include most of the biggest cash purchasers in the UK. Members must conform to a strict Code of Practice overseen by The Property Ombudsman and sellers have a right of financial redress should anything go wrong.

It is the role of The NAPB to promote the benefits of using a member to the public through newspapers, radio, television and organisations such as The Money Advice Service.

By using a member you can be far more confident that you are selling to a reputable buyer.

But what else should you look out for when considering selling to a we buy any house company?

What are the main causes for concern and how can you stop yourself being affected?

We look at seller’s main concerns and what to do about them.

Problem 1

Is Your Buyer Real?

It might sound odd but there are 100’s of companies (especially advertising online) who say that they will buy your house in days, for cash but they won’t. Why do they do it? Well, there is a lot of money to be made by people selling your data to real cash buyers. As you aren’t going direct, the buyer will factor in the cost of your data to their offer so you’ll get less for your home. Plus, do you really want to send your personal information to somebody who’s sole intention is to sell it?

Solution – Look for tell-tale signs that the company you’re looking at could be a ‘data-collector’, not a buyer. A reputable company will have a website, usually with lots of information, rather than just a few details and an enquiry form. Look for membership of The NAPB and The Property Ombudsman – their logo should be displayed on the website.

Look for a Company Registration number and a physical address for the company – most data collectors work from home or even overseas so don’t want that information on there.

Above all, if in doubt, go elsewhere. There are plenty of buying companies so don’t feel pressured.

Problem 2

False Timescales

Companies offering “cash in 5 days!” or “completion in hours!” or “to suit you”.

Solution – Once you’ve established you are talking to a genuine cash buyer find out their average timescale, not just their fastest ever. Once they know about your home they should be able to give a very realistic timescale as, for example leasehold flats usually take longer than a freehold house.

Problem 3

“Just Sign Here and It’s Sold” – or Not!

Some companies will ask you to sign an option agreement or lock-out agreement. This means they have sole right to buy your home, sometimes for months. Is that really what you want?

Solution – Don’t sign anything until it has been checked by a good solicitor. Explain to them what has been agreed ie. Price, timescale and any fees etc and check whether the agreement follows along with that.

Problem 4

Reservation Fee or Valuation Fee

A fee so they can buy your house, often called a ‘reservation fee’ or ‘valuation fee’.

Solution – Asking for money doesn’t make your buyer a fraudster, necessarily. But ask yourself this… if the company are buying your property, usually for less than it’s actually worth, why are you paying them anything?

Problem 5

Sale and Rent Back

Sell your home, get the money but you can carry on living there.

Solution – Sale and Rent Back (SARB) sounds like a great idea but it is virtually impossible to do as it is now regulated by the Financial Conduct Authority. If somebody offers it, there is a strong chance they are not authorised to do so, check with The Financial Conduct Authority.

Problem 6

Last Minute Price Reductions

You think everything is sorted and you’re even booking the removal van and you get a call reducing the sale price, sometimes by tens of thousands.

Solution – in rare situations, prices have to be reduced even at a late stage. This could be due to a legal problem, structural issue affecting the home or even planning approval for a new motorway near the house.

But the TPOS Code of Practice specifically says that reductions cannot be made without good reason. So to avoid this unhappy situation only sell to a buyer signed up to the redress scheme.

Problem 7

Fake Memberships

Beware of websites saying that they belong to The NAPB, The Property Ombudsman, RICS, Propertymark or any number of others, but don’t! You’ll be left completely unprotected if anything goes wrong.

Solution – To establish whether the company really is signed up to a professional organisation, check by going directly to the body’s website. Members lists for the NAPB can be found at on our members page and for The Property Ombudsman go to find a member.

Problem 8

Are They Genuine?

Everything sounds genuine but will they really do as they say?

Solution – Only use a company that publishes independent reviews on a third party website such as FeefoCheckaprofessional or Trustpilot. Read as many as possible to really get a feel for whether they are genuine and for an idea of the levels of service actually given, not simply promised.

We hope that these 8 simple steps will help to ensure a quicker, easier and safer sale of your property.

Remember, be cautious but there are also many excellent buying companies out there, successfully purchasing thousands of properties a year.

Just take a little extra time to check them out – a legitimate company won’t mind you asking as many questions as you want.

Article provided by one of The National Association of Property Buyers founding members House Buy Fast.

This content has been provided to us by the writer. Whilst believed to be factually correct, we cannot accept responsibility for content contained within it.

Jonathan Rolande

Jonathan Rolande (MNAEA MICBA MARLA) began in the property business in the late 1980’s and is a Director of House Buy Fast and helped to found The National Association of Property Buyers in 2013. He has worked closely with The Property Ombudsman to develop a Code of Practice for Residential Property Buying Companies.