Property Buying Companies Vs Auctions
There comes a time when you just need to sell your house fast and time isn’t always on your side. This effectively eliminates the option of selling your property online with an estate agent and just two options remain:
1) Sell your property fast through a regulated property buying company.
2) Sell your home fast through an Auction.
Both of these selling mediums have their pro’s and con’s and dependent on how quickly you need to sell your home both have their merits.
Good Move thought it would prove useful for homeowners to understand the mechanics for each selling medium so that they can make a considered decision on how they sell their property quickly.
1) What is a Property Buying Company?
A property buying company is typically a a company which purchases properties for cash and pays for home owners sellers fees involved in the transaction, generally inclusive of solicitors fees and there are no estate agents fees to pay. There are two specific types of property buying companies, these been either regulated property buying companies or unregulated, the former been the preferred type of company as legislation governs the property buying process.
2) What is an Auction?
An auction is simply a process of buying and selling properties and offering investors to bid on particular property lots, taking bids and then selling the property to the highest bidder. Once the auction hammer is hit, this effectively orchestrates an exchange of your property and the successful purchaser has 28 days to complete from that date.
1) Property Buying Companies can generally accommodate any sell house fast requirement and can buy properties in as little as 7 days (the average tends to be approximately 2 – 3 weeks).
2) Property Buying Companies when purchasing properties from homeowners pay for ALL sellers fees, so their legal fees are paid, together with valuations, surveys and there are no estate agency fees to pay.
3) A property buying company can buy any house in any condition. A quick house sale can still be achieved through a property buyer regardless of whether a property is structurally sound or not.
4) There are no fees to pay at all.
5) Property Buying companies generally purchase properties up to £500,000, although this price differs with some of the regulated property buyers in the industry.
7) Timescales cause no issue to property buying companies.
1) Homeowners will receive less than the market value, but generally receive a better price for a quick house sale than an auction would receive. Homeowners generally receive circa 80-85% of the market value for their home and all their seller fees are paid.
2) Unfortunately not all property buyers in the Quick House Sale industry are regulated and this unfortunately gives the industry a poor name at times. Good Move is the ONLY surveying practice in the industry who are regulated by the RICS (Royal Institution of Chartered Surveyors). If property buyers are regulated homeowners are in safe hands. There are currently around 13 regulated house buyers in the industry and homeowners should refer to NAPB to make sure they choose one of these companies for their quick house sale requirement.
3) A sale is only legal once it exchanges so up until that point a property buying company can withdraw at any point up to that point.
1) There is a good opportunity to maximize sale price.
2) There is a pre marketing programme which generally runs for a month before the auction date to try and gather interested parties to attend the auction to bid on properties.
3) Property buyers generally compete against other buyers and not the homeowner.
4) The Sale period from initial instruction of the auctioneer through to completion of the property is generally 10 weeks.
5) Unconditional sale secured on the day.
1) Auctions are an expensive medium to sell your property with fees often around 2% of the sale price.
2) Auctions are often seen as a last ditch approach to sell your property fast and for this reason, homeowners don’t generally receive the best offers, generally around 70-75% of the market value.
3) Auction sales aren’t particularly quick by the time you add the pre marketing prior to the auction and then following conclusion of the auction a total sale timescale is around 10 weeks, not always ideal when you need to sell your house fast.
4) If you try to sell your home quick through an auction and it doesn’t sell you can end up with a blighted property. This can end up been virtually impossible to sell your property at a later date.
In conclusion, selling your property fast is never an easy option and the option is really up to the homeowner.
The auction route is always a risky route as you never really know what you will achieve on auction day, thats if you manage to sell it at all. Also the time to sell a property through auction is circa 10 weeks so if you need to achieve a quick house sale, the property buying company route is often the preferred route as completion can take just 2 – 3 weeks.
The decision really comes down to the homeowner, we just hope this blog gives you an insight into the two different property selling mediums.
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