Everything You Need To Know:​

Are you dealing with a legitimate cash house buyer ? (2024)

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There’s no two ways about it, the cash house buying sector has a bad reputation. The waters are thick with sharks just waiting to pick off their prey and make a fast buck at your expense. Fortunately, there are some legitimate cash house buyers out there, genuine companies who want to work with you to put together a deal that benefits you both.

But how do you spot the sharks and how can you check that you’re dealing with a legitimate cash house buyer? In this article, we’ll talk you through a number of steps you can use to sort out the wheat from the chaff, the dolphins from the sharks as it were. 

It’s not easy, and no check is completely foolproof. However, if you put in the effort, you can significantly reduce the risk of being taken for a ride and find yourself a legitimate cash house buyer.

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1. Why it’s vital to check

It might seem like a lot of hassle to do research on every cash buyer you’re considering, especially when you’re already under pressure to sell your home fast for personal or financial reasons. But it will always be worth it. The average UK house price currently stands at around £282,000, so this is probably the biggest transaction you’ll ever be involved in.

Get it wrong, and it could cost you thousands or even tens of thousands of pounds, along with weeks or months of stress, and you could still end up selling just as slowly as an open market sale. Get it right, by choosing a legitimate cash house buyer, and you’ll end up with a fair price for a fast sale, with no stress or hassle along the way.

Clearly, it’s well worth putting in a little time and effort at the start, to save you time and money in the end. But where do you start when it comes to sorting out the chancers from the legitimate cash house buyers?

2. Are they a genuine company?

One of the simplest ways to check if you’ve found a legitimate cash house buyer is to make sure that they are a genuine company. It’s quick and easy to search for a company with Companies House online

A legitimate cash house buyer will always list their registered company number on their website (look at the bottom of the page), or they will be happy to tell you this if you contact them.

We called one company and the representative we spoke to had to ask their boss if they were allowed to give out this information. Their boss then wanted to know why we were asking. This is not a good sign.

Company registration is the very least that a legitimate cash house buyer should be able to prove. If your cash house buyer is not a registered UK company, or they are reluctant to provide those details, this is a serious red flag and they should be crossed off your list straight away. 

3. How long have they been established?

One of the useful things you can learn from Companies House is how long a company has been trading. As a general rule, the longer they’ve been trading, the more reassuring this is. Here at the Property Sale Watchdog, we use a measure of five years as a good indicator that you’re dealing with a legitimate cash house buyer.

Being new, or recently established, doesn’t necessarily mean that a company is dodgy. After all, everyone has to start somewhere, and even Apple and Microsoft were new companies once. However, you’ll have less evidence on which to base your assessment, and less independent reviews to read if a company has only been trading for a few months or a couple of years.

The shorter the time that a company has been established, the greater the risk that they’re a ‘smash and grab’ operation. These people set up shop as a limited company, rip off as many people as possible, then close the business down and walk away. Once a limited company has been closed down, it can be very hard to get any money back or compensation if you’ve been conned.

By the same token, just because you’ve been around for a number of years, doesn’t automatically mean that you’re a legitimate cash house buyer. Some companies have been pulling the wool over customers’ eyes for many years, and they’re somehow still getting away with it. 

How long they have been trading is just one element in proving that they are a legitimate cash house buyer.

4. Do they have a track record?

Another piece of evidence that Companies House can provide, is the track record of the business. Listings include what are known as charges. These show business activity and are an indication of both the volume of business that the cash house buyer is doing, and how they’re funding their purchases.

You can also ask the company themselves to show you their track record. Anyone can claim to have bought millions of pounds worth of properties, but a legitimate cash house buyer should be able to prove that by showing you their books.

It’s not unreasonable to ask this, and the genuinely successful companies will be more than willing to show off how well they’re doing. If they won’t do this, or they struggle to prove their past purchases, then walk away.

5. Can they show you proof of funds?

Speaking of seeing their books, you should always ask potential cash buyers for proof of funds, to show you that they’re truly in a position to buy your home themselves for cash. This is important, as many cash home buyers are nothing of the sort. They simply claim to be buying your house, while actually brokering a separate sale behind the scenes.

Ideally, you want a cash home buyer with their own money in the bank. This makes them a legitimate cash house buyer who can act quickly to complete the sale. Some cash home buyers have separate backers or investors, and while this is still good, it might slow things down a little.

If the company claims to be a cash buyer, but actually uses mortgages to secure their purchases, then this could seriously delay your sale. Just like on the open market, mortgages take time, even for seasoned buyers, and they also come with much more testing criteria for your property than a cash sale.

Asking a legitimate cash house buyer for proof of funds is standard practice, so you shouldn’t be afraid to ask the question. Any legitimate cash house buyer worth their salt should be happy to prove that they’re in a position to buy your home, themselves, for cash. If they refuse to prove this, or make you feel awkward for asking, then once again, cross them off your list. If they aren’t prepared to show proof of funds, then there are plenty more legitimate cash house buyers who will.

6. Are they NAPB or TPO members?

One of the best ways to check that you’re dealing with a legitimate cash house buyer is to check their registrations with the industry bodies. The cash house buying industry is not formally regulated by government, however they have formed their own professional body, the National Association of Property Buyers (NAPB), to try to raise standards. This is backed by The Property Ombudsman (TPO), and all NAPB members must also be registered with TPO.

The National Association of Property Buyers

The National Association of Property Buyers (NAPB) was specifically set up to protect homeowners looking to sell their houses for cash to a property buying company.

The NAPB continuously screens its members in order to see whether they’re maintaining the necessary business integrity, legality, professionalism and customer service.

It’s mandatory for all NAPB members to also register with The Property Ombudsman (TPO) and abide by the TPO ‘Code of Practice For Residential Buying Companies’.

The Property Ombudsman

The Property Ombudsman (TPO) defends the interests of the public by investigating and addressing complaints of maladministration or a violation of rights.

It has been providing consumers and property agents with an alternative dispute resolution service since 1990. TPO has a specific category for fast home sale companies who have to adhere to a strict ‘Code of Practice for Residential Buying Companies’.

It’s important to check on each organisation’s website to confirm that potential cash buyers are actually genuine members. It’s not unheard of for dodgy companies to simply copy and paste the logos of these groups on to their website, to give them apparent credibility, without actually having to meet the standards required for membership.

7. Do they have a published complaints policy?

If you choose a legitimate cash house buyer, then it’s unlikely that you’ll need to make a complaint. However, you need to make sure that there is an established process to do so, just in case you do need to. 

A legitimate cash house buyer should have a formal complaints policy listed on their website. This should give you details of who to contact if you have a problem. It should also set out the timeframe in which you can expect a reply, as well as the next steps to take if you’re not satisfied with their response.

Remember, a legitimate cash house buyer will always be registered with The Property Ombudsman, who will be able to handle any complaints that are not satisfied directly by the company.

7. Are they registered with ICO and GDPR compliant?

It might not seem important, but you should always insist that a legitimate cash home buyer is registered with the Information Commissioner’s Office. You’ll be providing your cash buyer with a great deal of personal information, including bank details and other private data, so you need to know that this data will be dealt with correctly. You need to be confident that your personal data is safe and that your privacy will be protected.

A legitimate cash house buyer will have a published privacy policy on their website, or available on request. This will set out how your data is stored and handled, and what it will be used for. Many will also have a cookie policy. 

Take the time to read the small print of these policies, as they often contain details of all the ways that the company may pass on, or sell, your data to other ‘interested parties’. Choose the wrong cash house buyer and you could end up drowning in a constant torrent of spam and sales emails.

The Information Commissioner’s Office (ICO) is the UK’s independent regulatory body set up to uphold information rights. The ICO also governs all forms of data collection and advertising intelligence.

By being registered with the ICO, a legitimate cash house buyer is committed to protecting its customers’ data at all times.

The ICO also has a Free Online Checker where you can verify whether a company is registered with them or not.

8. Do they have positive independent reviews?

These days, you can find independent reviews of almost any business or service, and cash home buyers are no different. You can find reviews on Google and on sites like Trustpilot, and these will give you a good sense of what the company are like to deal with, what kind of offers they make for properties, and whether or not they stick to these offers.

Once again, you should check these reviews on the sites themselves. Often companies will show a star rating on their own website that is out of date or exaggerated. By going direct to Google or Trustpilot, you can check what their latest reviews are saying, and how the company is doing right now. 

Make sure you read all the reviews, even the bad ones. A company may have many good reviews, but also a number of bad ones. If the bad ones all tell the same story, such as a drop in offer price late in the deal, then this can outweigh many good reviews. 

Bear in mind that there are lots of people who don’t understand how the fast cash home buying market works. Some of these people will always be disappointed even with a fair and reasonable price, and will post negative reviews about being ripped off.

Naturally, you need to treat reviews with caution, even apparently independent reviews. It is possible that positive reviews have been planted by companies to help them to look good. At the same time, companies can sometimes plant bad reviews in order to discredit their rivals and make them look bad.

8. Can you speak to past customers?

A good way to avoid the uncertainty of so-called independent reviews, is to speak directly to past customers yourself. A legitimate cash house buyer should be happy to put you in touch with genuine past customers, who will tell you all about their experience. This will give you the truth, from the horse’s mouth as it were, including details that were left out, or edited out, of their online review.

Once again, you should bear in mind that cash house buyers will only put you in touch with people who they know to be happy, satisfied customers. You will not get a genuine cross section of opinion, even by talking to past customers in person.

9. Are they making an unrealistic offer?

Once you’ve filtered out all the obvious crooks and conmen from the pile, you can start to contact your shortlist to see what they have to say for themselves. This will then give you even more ways to tell if you are dealing with a legitimate cash house buyer.

The first, and easiest, way to spot a con is to look at the deal they’re offering you. As we discuss in other articles on the Watchdog website, even a legitimate cash house buyer can only offer you so much, and they can only act so fast.

The best offer you will realistically be able to achieve is around 80% of the market value of your home. Under very specific circumstances, where stamp duty doesn’t apply, you may get up to 85%, but this is rare and generally only reserved for the very best properties.

If a cash house buyer offers you 90% or more, then this is another red flag. It’s simply not practical or profitable for them to genuinely offer this much. Chances are this offer will be reduced later in the process, often at the last minute when it’s too late to change your mind.

A genuine cash offer of 80%, from a legitimate cash house buyer who has a reputation for sticking to their offer price, is always going to be better than a 90% opening offer that ends up delivering just 70% or less.

The same is true about timescales. A quick cash sale still takes a few weeks to complete if you want the best price. It is possible to get a faster sale, in just seven days, but you’ll get significantly less for your property, and it generally isn’t worth it. Banks, former partners and other creditors will usually be prepared to wait a few weeks if they know a sale is progressing, so there’s rarely a need to accept less for a seven-day sale.

If a cash home buyer is offering a sale at 80% or more in less than two weeks, then this is unlikely to actually happen. Either they’ll end up offering you less, or they’ll take longer over the sale. If they’re claiming to be able to buy your home in less than seven days, you should be particularly wary, as this is very expensive and almost impossible to pull off.

10. Do they ask you to sign a contract?

Even if you’re happy with the company you’ve chosen, and they’ve passed all the above tests to prove that they are a legitimate cash house buyer, there’s still one more hurdle to get over. 

You can have a great cash offer price for your property, with the promise of a fast transaction, but if they ask you to sign a contract, you should still walk away. There is simply no place for contracts in a cash home sale and you should never sign one under any circumstances.

Contracts are written by the buyers, for the benefit of the buyers, and will only even be to your detriment. If you have chosen a legitimate cash house buyer, who are everything that they say they are, then they shouldn’t need a contract to keep your business. You should want to do business with them of your own accord.

A cash house buyer will only need to lock you in with a contract if they’re planning to do something that might make you walk away. Indeed, some dodgy companies use this as their whole business model, making most of their money from contract penalties, by behaving so badly their customers are happy to pay to get away.

11. How do you feel when you talk to them?

Once you’ve narrowed down your list – and believe me, very few cash home buyers will get past all of these checkpoints – how do you then pick a legitimate cash house buyer form those who are left? 

One important factor that’s often overlooked is how they make you feel. That might sound a little airy-fairy, but it’s important to feel trust in the company you’re dealing with. You need to feel that your business is important to them and you’re not just another entry into their profit and loss accounts.

You need to talk to the company directly and get a sense for their customer service. It also helps if you’re assigned a dedicated member of staff, who’ll get to know you and your home, so that you aren’t always starting from scratch when you call.

A legitimate cash house buyer will be happy to take the time to talk you through the process and answer any questions you may have. They should also be available throughout the process for any queries you have along the way. The very best legitimate cash house buyers will publish their customer service policy on their website, setting out clearly their commitment to you and the levels of service you should expect from them.

11. They need to pass all these tests

The cash home buying market is packed with businesses large and small, from the outright conmen to the legitimate cash house buyers. That means that there’s plenty of choice out there for you.

A legitimate cash house buyer should be able to pass all of the above tests, and you should never have to compromise or settle for ‘the best of a bad bunch’. It’s not a case of who passes the most checks; a legitimate cash house buyer needs to pass them all to make it on to your shortlist. No ifs, no buts. Failure to meet any one of these standards can make passing the rest irrelevant. If you accept anything less than a full house, then you are setting yourself up for failure.

11. Trust the Watchdog for free, fair advice

Reading this article, you might end up feeling that finding a legitimate cash house buyer is a lot of hard work. You need to do research at companies house, find independent reviews, check their memberships and so much more, just to get to your shortlist.

But that’s where the Property Sale Watchdog comes to your rescue. We’ve done all of this research, and more, for all of the leading cash home buyers in the UK. Check out our independent reviews and you’ll see all this information gathered together for you by our expert research team.

Our reviews even cover the finer details like the opening hours of the company and how quickly they answer the phone. These little things can make a big difference to your choice of company and how easy they are to work with.

Each review follows the same format, so you can compare like for like. You can read our conclusions, or draw your own conclusions based on all the information provided. Our reviews are not here to sell any particular company. They’re here to make sure that you can make a fully informed decision and find a legitimate cash house buyer that works for you.

Final Thoughts

Considering everything we’ve outlined, it’s easy to see why the cash home buying industry has such a bad reputation. There are countless red flags and warning signs that should steer you away from company after company.

But the good news is that there are legitimate cash house buyers out there if you are prepared to look for them. And with the help of this guide, you should find it much easier to identify these companies and to get yourself a great deal for a fast and hassle-free home sale.

Just remember; a legitimate cash house buyer should be able to pass all of these tests, not just most of them. And if they do, then you can be confident that you’re in safe hands, with a genuine offer that won’t change at the last minute.

 

You don't have to do this alone

To understand why going through us is both better and safer, instead of going directly to your home buying company of choice, click the button below.

We want to help out as many people as possible. That’s why we created this comprehensive article. Depending on your preference and circumstances, we’ll connect you for free with one of our strictly vetted, ethical partners.

They will help you sell your property for the best offer you can realistically achieve. They will take care of all of the legal processes and fees and you’ll get the cash straight into your bank account.

With our partners you can achieve a very fast sale or a slower one if you’re not pressed on time. Faster sales usually yield a lesser price but they save you time. It all depends on your circumstances and preference.

Look After Yourself

We hope this article has given you ample guidance on how to avoid the dodgy companies and find a legitimate cash house buyer. 

We aim to arm you with as much knowledge as possible so that you feel better prepared for any eventuality. 

Remember – your financial health is important, but mental health must always come first. 

Wherever you are in the process, make sure you talk to people regularly, whether it’s friends, family, trusted co-workers, or helpful agencies. 

Taking time away from dealing with phone calls and paperwork is crucial for clearing your mind, and keeping your sanity in tough times. 

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