OFT investigate fast house sales

With the continuing slump in the UK housing market, it’s fairly rare for a home to sell quickly at full asking price unless the seller has very pragmatic expectations. Due to economic hard times, the situation often arises where a home owner is forced to sell in a hurry, and many have turned to the ‘quick sale’ companies that have sprouted up to aid – and in some cases take advantage of – desperate sellers.

The Office of Fair Trading is investigating some of the questionable practices that have been reported in these quick sale transactions, and asking for anyone who has had dealings with one of the providers to report any questionable practices they may have encountered. OFT warns that signing a contract without careful attention to the details could cost home owners a lot of money; whether there is any recourse for recovery is uncertain.

It appears the most common variation in cases being investigated is a sudden and drastic reduction in the agreed price just before the sale is finalized. Last year the BBC reported at least two such cases, one involving Gateway Homes UK in Lincolnshire and one in Teeside with Tom Craven Property as the buyer.

In the first case a sale price of £120,000 was agreed, but just before final signing the price was reduced to £80,000; in the second similar transaction the agreed price was £75,000 but the closing price was £40,000. That’s quite a comedown, though both companies involved claimed that only 1% of their customers have complained about any discrepancies in the original agreement and the final outcome.

The OFT said that those sellers most vulnerable to the quick sale operators are often in financial straits and facing foreclosure, couples who just suffered a break-up, or elderly people needing to finance assisted living. The quick sale companies generally claim they’ll buy or find a buyer in a week or less and pay cash, of course at a discounted price. That’s often enough to convince a seller, who may not read the fine print about fee structures and penalties for breach of contract.