Need To Sell Property? Should You Consider A Homebuying Company?

Selling a property can be one of the most stressful things you can do and unfortunately this event is sometimes forced on people. Due to external factors many people find themselves in a situation where they need to sell their home quickly. The operative word here is need rather than want. Often this is due to financial difficulties, divorce, separation, emigration or the threat of repossession and eviction. In these circumstances selling on the open market via an estate agent is not the ideal solution due to the time it takes.

Selling via an estate agent is the preferred route of most property sellers and accounts for 90% of all sales. The reason why this method continues to be so popular is that it allows the seller to get near the maximum price possible for their property (assuming they are using a good estate agent which is not always the case). Just a quick note on this: the market value and is the price that people are willing to pay for the property. Sounds simple but it is important to distinguish that the value of a property is what people will pay and not what surveyors or estate agent say. Most of us have seen (either on TV or through personal experience) 3 different estate agents value the same property and come up with 3 very different prices. They are guesstimates but many people chose the highest and hold on to this as fact.

Anyway, I digress. Selling via an estate agent normally takes anywhere between 4.5 to 7 months with 6 months being the average. It is also worth bearing in mind that 1 in 3 of these sales collapses down due to chain breaks. The buyer and seller then have to start all over again. So this is not the ideal solution if you need to sell your property quickly. Those who do are increasingly turning to specialist home buying companies as well as the traditional auction route.

Home buying companies can offer the best option to some people who need to sell their homes fast. So what can they offer:

1. Exchange in days and completion in less than a month
2. Guaranteed sale (they buy with cash or have pre-agreed finance in place)
3. Pay sellers legal fees up to 500 GBP (which normally covers total cost)
4. No Estate agency fees
5. No HIP required by seller (as it is a private sale)
6. Many offer option to rent back if you are in financial difficulty
7. Some also offer option to buy your property at a fixed price in the future

That is basically it. You get a quick guaranteed sale with no fees to pay. So what is the catch? Why does everyone not use them? Well the biggest reason why they are only suitable for those needing a quick home sale is that they will only offer to buy properties at a discount. Normally, 20-30% below market value. Therefore if you have a house worth 100,000 GBP they will offer to buy it at between 70-80,000 GBP. They take this discount as they are in a business to make a profit They normally try and make a 5% profit for each purchase. 5% is normally all they get after the costs of buying, marketing, waiting for the property to be resold, and selling costs.

In conclusion, if you need a quick sale and are willing to sell your property at 70-80% of its value then this method is worth considering (it is approximately what you will get at an auction but you will incur more costs selling via this route and there is no guarantee it will sell). If you would just like a quick sale, then your best option is to use a very good estate agent.

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