The Office of Fair Trading has launched an inquiry into ‘quick sale’ companies, saying that desperate sellers are in danger of being misled. It is calling for evidence from estate agents and advisers who come across the practice, as well as from those who may have been stung.
The OFT says sellers are often offered a reduced price – which is then reduced again at the last minute, leaving sellers with no option but to accept. “Any losses could be very high,” the OFT warned.
It also says that consumers are promised quick cash but often don’t see the money for some time, and might find themselves bound in by exclusivity contracts which stop them selling to someone with a higher offer.
The OFT is also concerned at the unclear fee structures that abound in the ‘quick sell’ industry, along with false claims to be a cash buyer.
“Businesses offering quick house sales may provide a useful service for home owners who need to unlock cash in a hurry,” said Cavendish Elithorn of the OFT.
“However, they are often used by consumers in vulnerable situations and therefore we are concerned about the risk of consumers being misled and losing out on large sums of money,” he said.
Consumers identified as at risk include those selling after a relationship breakdown, people trying to avoid repossession, and the elderly who need the money to pay for long-term care. The OFT has asked 50 quick sale companies for information about how they operate.
The NAEA welcomed the OFT investigation, saying that its members have reported a sharp rise in quick sale rip-offs.
Mark Hayward, president of the NAEA, said: “Our members have noticed a significant increase in the number of companies purporting to offer cash purchases on properties in whatever condition within 24 hours.
“We are finding that it is often families who are in desperate financial circumstances who are targeted through website advertising and a door-to-door sales approach.
“The tough economic conditions mean that in some cases sellers are pressurised into making quick decisions to sell their property. They sign the contract at an agreed price only to find that they are offered a vastly reduced rate just before the sale.
“In a highly pressurised situation it is understandable that many people are following the advice of quick sell services to accept these last-minute lower offers.”
The OFT has also warned about quick sale companies making false property valuations.
The OFT is calling for evidence which can be emailed to the address below. Consumers who may have had dealings with quick sale companies are being promised confidentiality.
Christopher Woolard, director of policy, risk and research at the Financial Conduct Authority, said: “We welcome the OFT’s market study. Consumers facing repossession of their home are in a very vulnerable position and it is important that they are not pressurised into making poor decisions.”
quickhousesales@oft.gsi.gov.uk
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