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As it stands, the cash house buying sector is not formally regulated, and unfortunately, this opens the door for anyone and everyone who wants to make a fast buck at your expense. There are open and honest companies out there, but sadly there are lots of opportunists too. So how can you tell them apart and how can you make sure you’re getting a fair deal for your fast home sale?
Your next step
Once you’ve read our impartial guides, you’re completely free to choose a cash homebuyer and contact them yourself. There’s no obligation to use our introduction service. We’ll be happy to have helped you to find a cash buyer you can trust and stop you being taken for a ride. Our work here is done!
However, we understand that choosing a cash buyer for your home is a big decision, so if you prefer, you can break it down into easier steps.
First, click the cash offer calculator button below to see how much cash buyers offer for properties like yours. It’s completely free to find out, and it only takes a couple of clicks. You don’t have to give any personal information, just an estimated value of your home.
Then, if this figure works for you, simply add a few more details of your home and we’ll connect you with the cash homebuyer we think is best suited to you. There’s no obligation to use this company or accept their offer, but it’s probably as good as you’ll get.
Our recommendation costs you nothing and could even get you a higher offer. The PSW is well-respected within the industry and companies will go all out to prove that they’re worthy of our recommendations, so that we keep sending customers to them.
Click below to start your home selling journey.
The Office of Fair Trading Report
In response to numerous complaints from customers, the cash house buying sector was investigated in detail by the Office of Fair Trading in 2013. The OFT produced a damning report which raised a number of serious concerns. The report identified ‘business practices that may not comply with the law and practices that fall short of the standards we would expect of businesses in this sector’.
While this report did acknowledge that there were ‘good’ companies operating in the cash house buying industry, it also noted several shady practices that had damaged the reputation of cash house buying and harmed many of the customers who used it. These concerns included:
- Unrealistic offer prices – based on low valuations or excessive fast purchase discounts
- Last minute reductions – ranging from 7% to 53%, and averaging 22% amongst the complaints they received
- Slow service – despite headline claims of 7-day sales
- False buyer claims – in which companies were not actually buying the property but brokering a third-party deal
- Unnecessary contracts – tying customers into long term, exclusive agreements with expensive penalties if they pulled out
As a result of the investigation, the OFT wrote to more than 120 operators in the sector to remind them of their legal obligations. A further three companies were put under investigation for potentially illegal practices.
The OFT also opened a dialogue with the cash house buying industry to encourage some form of self-regulation, with the warning that formal government regulation could be introduced if this did not happen.
The launch of the National Association of Property Buyers
In response, the National Association of Property Buyers (NAPB) was formed in 2013 as a self-regulatory body for the cash house buying sector. This independent industry association aims to improve the poor reputation of the sector, and to differentiate between the genuine operators who are offering a value for money service and the shady dealers who are simply in it for themselves.
The NAPB is not, in itself, a regulatory body and membership is entirely voluntary. However, one of the conditions for membership is that cash buyers must be members of The Property Ombudsman. This means that they have agreed to follow the TPO Code of Practice for Residential Buying Companies and have also agreed to independent TPO resolution and redress in cases of dispute. While far from watertight, this does give potential customers some measure of peace of mind when choosing a cash house buyer.
You can find out if a cash house buyer is a member of NAPB by visiting the members page their website. You can also double check their membership of The Property Ombudsman by visiting the TPO members page.
What does the NAPB do?
The NAPB helps you to separate the wheat from the chaff in the cash house buying sector. Since membership is voluntary, joining the NAPB shows a willingness on the part of the cash house buyer to operate in an honest, transparent and trustworthy way.
Members agree to operate in line with The Property Ombudsman Code of Practice, giving you further reassurance as to how you will be treated. This includes having a clear complaints procedure with set timescales for responses.
As TPO members, NASB members also agree to binding dispute resolution by The Property Ombudsman. This can include compensation payments to customers who have been treated unfairly.
What does the NAPB not do?
While the NAPB is a positive step towards improving the reputation of the cash house buying sector, and to improve the experience of its customers, it should be noted that it is not a ‘magic bullet’.
The NAPB offers you some peace of mind as to the intentions and ethos of its members, However, since anyone can join the NAPB, there is no automatic guarantee of good service or a value for money deal from a NAPB member.
The NAPB is not a formal government regulator and it has no powers of its own. It cannot impose restrictions, fines or other penalties on member companies, nor can it tell members how they should operate their business.
In fact, aside from the mandatory membership of TPO, there is little to distinguish NAPB members from non-members. It could be argued that TPO membership is enough on its own, and that NAPB membership adds little to this level of protection.
Other factors to consider
There are a number of important factors to consider when choosing a cash house buyer, and membership of NAPB is just one of them. You also need to check:
- The track record of the company – by using Companies’ House, independent review sites and by talking to previous customers
- The financial position of the company – by asking for proof of funds and confirmation that they are actually the buyer in the deal
- Conditions of the deal – by making sure that there are no contracts to sign and no lengthy lock-ins
- The offer price and guarantees – by asking for full transparency about your valuation and your discount, along with guarantees that this offer will not change
- Other memberships – by looking for membership of The Property Ombudsman, approval by the Chartered Trading Standards Institute and registration with the Information Commissioner’s Office.
The Property Sale Watchdog has done the checking for you
It can seem like a lot of time and effort, but its worth remembering that there are thousands, possibly even tens of thousands of pounds at stake. Even if you need a sale as fast as possible, taking time for due diligence is essential if you want to get the best deal and avoid getting ripped off.
Fortunately, the Property Sale Watchdog has done all this legwork for you. Our expert, independent researchers have thoroughly reviewed dozens of the top cash house buyers to find the very best.
We’ve looked at their history, their current finances, their reviews and reputation and their memberships, as well as putting their social media and customer service to the test with live ‘secret shopper’ checks.
To see who came our top in our independent reviews, click here.
Once you’ve read our impartial guides, you’re completely free to choose a cash homebuyer and contact them yourself. There’s no obligation to use our introduction service. We’ll be happy to have helped you to find a cash buyer you can trust and stop you being taken for a ride. Our work here is done!
However, we understand that choosing a cash buyer for your home is a big decision, so if you prefer, you can break it down into easier steps.
First, click the cash offer calculator button below to see how much cash buyers offer for properties like yours. It’s completely free to find out, and it only takes a couple of clicks. You don’t have to give any personal information, just an estimated value of your home.
Then, if this figure works for you, simply add a few more details of your home and we’ll connect you with the cash homebuyer we think is best suited to you. There’s no obligation to use this company or accept their offer, but it’s probably as good as you’ll get.
Our recommendation costs you nothing and could even get you a higher offer. The PSW is well-respected within the industry and companies will go all out to prove that they’re worthy of our recommendations, so that we keep sending customers to them.
Click below to start your home selling journey.
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