'Instant' property buying companies - has anyone had a good experience?

sclare

I have had a nightmare of an 18 months of legal difficulties that my late parent left behind. The final thing that will need sorting is the disposal of a rental property, which has not been looked after, and when the tenants finally go, it will probably be down to bailiffs and it's likely they'll leave it in even more of a mess. But it's a reasonably newish property (15 years old) so there shouldn't be any structural or expensive problems. But it will definitely be a doer-upper and not look attractive in the marketing photos.

It's unlikely to be put on the market until autumn/winter, so the market will be pretty dead. And I just don't have any more emotional capacity to have it hanging around and costing me money for months on end.

I know that I'd lose a significant amount of value if I used one of these 7 day companies, but to be honest, it could be worth it to me to get my mental health back. What I'm more concerned about is one of these companies messing me about at the last minute and causing me more stress.

Has anyone dealt with one of these companies and had a good experience? Any hints on how to suss out a decent one?

RAS

Don't.

When it's empty pay a house removal company and get a deep clean done, at cost to the estate. Given the time of year, consider a boiler maintenance.

Then sell using a normal auction house, not the Modern Method of Auction. You'll lose most potential buyers using MMOA. 

eddddy

You need to consider the business model of those companies.

They don't want to be left owning a bunch of 'difficult to sell properties'. In reality, they don't actually own any properties, and they generally have no money to buy properties anyway - they're just 'middlemen'.


They will buy your property in 7 days, but only if they can find somebody to sell your property to within the same 7 days. (It's called 'back to back' transactions.)


For example, if they think they can sell your property for £300k within 7 days, they might offer you £260k.

If they're successful and get a sale within 7 days, they'll buy your property for £260k and sell it it again on the same day for £300k. (And they'll keep the £40k difference).

If they can't find an onward buyer, they won't buy your property.


So you'd probably be better off just selling through a regular estate agent setting the price low enough that it will sell within 7 days (in this example, that would be £300k).

sclare

Thanks RAS.
The thing that puts me off auctioning it, is that it might not sell at all (or that's what I've been warned of) and I'd still have to pay the auction house.

eddddy

sclare said:

Thanks RAS.
The thing that puts me off auctioning it, is that it might not sell at all (or that's what I've been warned of) and I'd still have to pay the auction house.

If the property is mortgageable, I wouldn't auction it. Buyers can't really get mortgages on auction properties - so you'd be cutting out a huge pool of buyers, who'd want to buy a 'dooer-upper' with a mortgage.


I would just use a regular estate agent with a low guide price - and leave it on the market for 2 or 3 or 4 weeks (and forget about it during that period), and then see what offers have come in at the end of that period.

(The technical name for this is an 'informal tender')

RAS

eddddy's right but you need to be very very careful about the EA's terms and the period before you can cancel the deal. 

user1977

sclare said:

The thing that puts me off auctioning it, is that it might not sell at all (or that's what I've been warned of) and I'd still have to pay the auction house.

If it can't be sold even at auction, then why would the house-buying companies be interested either? All they're going to do is flip it for a big enough margin to take a profit.

ExEstateAgent

sclare said:

Thanks RAS.
The thing that puts me off auctioning it, is that it might not sell at all (or that's what I've been warned of) and I'd still have to pay the auction house.

As long as the reserve is realistic then given what you said I think it would sell - failing that most auction houses offer to put the property in a following auction if it doesn't sell first time.

If you don't need to get shot of the place ASAP then try putting it on with an estate agent, if it's cheaper than other similar properties (but in better condition) then you should sell quicky - this assumes the work it needs is mostly cosmetic. There's lots of buyers who will be happy with a run down place that they can improve over time. 

Brie

If it's been a rental property and if the location is good why not contact a local firm that does a lot of property rentals.  There's one local to me that I've been told has hundreds of flats/houses all of which are rented out.  They even have their own fleet of maintenance vans.  Someone like that might be interested in have a look knowing that they will get a good price to buy it and if the location is right then they can tidy it up quickly and rent it out faster than most.  The alternative might be a housing association or charity that provides accommodation for council tenants.  Of course whatever you do you will need to get in a couple of EAs to have a poke about and give you an idea of the property's value so you know what price is normally achievable and can decide what you are willing to sell it for.  Keep in mind that if there's no EA involved then there are savings to be made.  

As for the instant sell firms - I've heard of them making an offer and waiting to the last minute and pulling out, at which point someone else shows up willing to take the place off your hands for even less money.  People, so fed up, like you, just go for it rather than having everything dragging on.  Obviously there may be no connection between the firm and the ultimate buyer but I have my suspicions. 

Sorry that the loss of a parent has been so very stressful.  I'm just at the start of that 18 month journey although, thankfully, it's not a rental.

FreeBear

sclare said: The thing that puts me off auctioning it, is that it might not sell at all (or that's what I've been warned of) and I'd still have to pay the auction house.

A friend of mine recently sold a property at auction - It needed a lot of work doing to it (rewiring, heating system, roof, doors & windows) including a pretty serious structural defect. Listed at £90K, and I estimated it would go for £120-130K. Sold at £160K - In good condition, and not needing any work, it might have realised £200K.

From start to finish, the entire process took about four weeks. I doubt any of these We-Buy-Your-House-Quick outfits would have achieved a similar turn round, and certainly wouldn't have got close to the hammer price.

Auctions can be a quick way to sell a property, and once the hammer falls, that is the price it is sold at. Nor is there any attempt to renegotiate a lower price or screw you for additional fees.

eddddy

FreeBear said:

From start to finish, the entire process took about four weeks.

Selling by auction generally takes a bit longer than that.

The steps involved are usually something like this:

• 1) Instruct a solicitor to prepare a legal pack. (Searches often take 2 to 6 weeks to come back)

• 2) Then Auction Marketing usually starts 2 weeks before the auction date

• 3) There is usually 4 weeks between the auction date and completion

But you also have to bear in mind that many auction houses have fixed auction dates, maybe once a month or once every 2 months or once every 3 months.

So maybe the searches / legal pack are finally ready today, but it is 4 or 6 or 8 weeks until the next auction date. 

(It might be a bit quicker, if you decide you don't care which auction house you use - you just go with whichever is soonest. But some auction houses are better than others for different types of properties, and different areas.)


You can 'cut corners' e.g. by starting the auction marketing before the searches come back - but that's a bit risky, and it might put off some buyers.