Using a house buying agency

LV_426

Our house has been on the market for over a month and we've had little interest, despite reducing the price.
I received a letter from a house buying agency and they buy houses for cash. Obviously I'm under no illusion that we'll get anywhere near the asking price. But that may not be an issue, due to the difference in selling, and buying our favoured house.

Just wondering if this approach is advisable, whether these companies are reliable, or any experiences dealing with them?

MultiFuelBurner

Searching this site it appears the best way is to reduce the price of your house until it sells rather than deal with these types of we but any thing for cash companies they will give you a very low offer.

hazyjo

You'd be better off making a large reduction on asking price. You won't find people recommending them here (well, extremely rarely!).

They're likely to offer you WAY under its value, and may find a reason to drop the price again just before exchange.

SadieO

LV_426 said:

Obviously I'm under no illusion that we'll get anywhere near the asking price. But that may not be an issue, due to the difference in selling, and buying our favoured house.

If you're prepared to accept a lower price from such an agency, why not just reduce your asking price to that and sell it to a "real" buyer? I've heard that those agencies not only offer you a lower price to start with but drop the price right at the last minute when you feel you have no choice but to proceed. At least a real buyer (hopefully!) won't be trying to rinse you out of every last penny, especially if they are getting a bargain to begin with. 

Have you had any advice from your estate agent on what might make your house more saleable? Do you feel like sharing your listing to see if anyone here has any ideas? A month doesn't seem that long to me. How long are similar properties to yours staying on the market? 

Brie

In the last month we've had 2 bank holidays and kids off school.  I would have thought that might slow demand for viewings as many adults will be busy doing other things.  I'd give it at least another month.

And the "we buy" give you a basement bottom price and then flip it for a chunk more - that's how they make their money.  If they can find a buyer so can you.

UnderOffer

What type of buyer do you think your home is aimed at, first time buyers or those downsizing or families in 2 beds looking for bigger? Or is it a very niche property with not much interest because of that? Have you had any viewers, what was feedback? 

eddddy

LV_426 said:

I received a letter from a house buying agency and they buy houses for cash. Obviously I'm under no illusion that we'll get anywhere near the asking price. But that may not be an issue, due to the difference in selling, and buying our favoured house.

Just to clarify - these companies don't buy houses in the way you probably imagine.

They don't have any money to buy houses. Typically, the company just comprises of one or two dodgy salespeople with mobile phones.

Typically, they work like this:

• 1) Let's say your house is on the market for £300k

• 2) They might decide it would easily sell in 7 days, if the asking price was reduced to £250k

• 3) So they will try to persuade you to sign an "Option to Purchase" contract for £200k

• 4) They will then look for a buyer willing to pay £250k

• 5) If they find a buyer willing to pay £250k, they will do a back-to-back purchase/sale

• 6) i.e. The will buy from you at £200k, and sell for £250k to their purchaser at the same time on the same day

• 7) So on that day, they make a £50k profit - even though they don't have a single penny to start with

• 8) If they can't find a buyer who will pay £250k - they'll just walk away

The can call themselves a "house buying" company - because technically, at step 6 they do buy you house (and maybe own it for a few minutes!).

LV_426

Thanks for the comments. I was aware of their trick of lowering the price late in the day (have had a regular buyer in the past who did that, 4 days before exchange!).

Anyway, good news today in that we've had more interest from people who previously looked, and a couple more parties. We did lower the price a bit, and tbh it was a tad over to start with.