Case By Case: Selling Distressed Properties To ‘We Buy Any Houses’ In The UK

A man stands in front of a rug at the door of a house

For homeowners facing financial hardship or other difficulties, selling a property to a ‘We Buy Any Houses’ company can seem like an attractive option. These companies promise to purchase properties quickly and for cash, without the need for renovations or showings. While this route offers a fast sale, homeowners may leave money on the table by selling to these buyers below market value. Carefully weighing the pros and cons of each property and situation is key.

When Financial Distress Leads to a Distressed Sale

Job loss, divorce, illness, or other unforeseen circumstances can sometimes lead to mortgage arrears and the inability to make repairs or maintain a property. With financial distress mounting and pressure from the lender, selling the home may be the only option to avoid foreclosure. However, making rushed decisions under financial duress rarely leads to optimal outcomes.

While selling to a ‘we buy any houses’ company brings a quick cash sale, these buyers will make low offers based on their ability to turn profits from distressed properties. Savvy sellers in financial straits can still aim for better sales outcomes through proactive planning and proper property preparation.

Gather Facts to Assess Position

Before deciding on a sale plan, distressed homeowners need to realistically assess their situation and options. This requires gathering precise details on the amount owed on the mortgage, equity position, overdue payments, credit rating impacts, and lender communications.

Review finances to see if budget changes could free up funds to carry the property longer. Check on any resources or assistance programs that could provide temporary financial relief.

Having a clear picture of the circumstances and risks of defaulting can determine if an immediate sale is truly necessary, or if the owner has some time to market the property properly.

Consider the Pros and Cons of a Fast Sale

Weighing the potential benefits against drawbacks helps assess whether a quick cash property sale makes sense.

Selling to a ‘we buy any houses’ company brings these possible advantages:

Speed – The sale can close in as little as seven days in some cases, compared to months on the open market. This provides fast access to cash.
Certainty – The sale is guaranteed once an offer is accepted, versus the uncertainty of finding a buyer.
Convenience – The company handles all paperwork and legal processes for the sale and purchase.
No costs – These buyers pay all survey, legal, and move-out fees, so the seller has no transaction costs.
Flexible move-out – Companies may allow extra time to vacate after completion.
No repairs – Structural and cosmetic issues do not need fixing in advance of the sale.
Cash sale – Settlement is made in cash, without any need to arrange buyer financing.

Potential drawbacks to assess include:

Below market value – Offers typically range from 60-70 per cent of a property’s market value.
No exposure – The property is never listed openly on the market, so the value is not tested more widely.
Limited negotiation – Asking for a higher price from a cash buyer is unlikely to succeed.
Additional costs later – If selling under financial duress, the loss on sale price compared to market value may mean the seller then struggles to buy the next property.
Poor timing – Those not facing immediate default could get better terms selling in 6-12 months, once any arrears are cleared.
No agent assistance – DIY selling means not having expert help on property valuation, marketing, and buyer vetting.

Objectively weighing up the pros and cons helps inform the decision on whether to sell to a ‘we buy any houses’ firm under specific circumstances.

Be Realistic On Market Value

Given that ‘we buy any houses’ companies will make low offers based on their maximum purchase formulas, sellers should have a realistic view of the true current market value. Professional appraisals consider recent comparable sales, condition and location factors to assess real worth.

Online valuations only give a rough figure, often overstated. The council tax banding is not an accurate value indicator either. Paying a surveyor for an appraisal before contacting cash buyers gives a clearer picture of potential sale proceeds on the open market.

While the quick offer seems attractive when under duress, if financial pressures allow, taking proactive clean-up steps can boost the value and sale price. This includes decluttering, basic repairs, cosmetic upgrades like painting, and landscaping. Investing a small amount upfront can enable a higher return.

Vet the Cash Buyer Carefully

Not all companies promising fast home purchases operate ethically or professionally. Sellers should research ‘we buy any house’ firms before agreeing on deals.

Check for:

Longevity – Look for an established company trading for several years.
Professional memberships – Reputable firms belong to industry organisations like The Property Ombudsman.
Testimonials – Genuine positive reviews indicate they treat sellers fairly.
Range of services – Ethical firms buy properties needing any level of repairs, not just wrecks.
Transparent about the process – They explain timescales, fees and offer basis upfront.
Genuine interest in the property – More engaged buyers often pay more competitive prices.

Avoid cash buyers who:

Make unrealistic promises of incredible prices.
Push for an immediate answer on their offer or claim another buyer is interested.
Are vague on their business, processes, or timescales.
Cannot provide seller references.
Seem too good to be true.

Vetting ‘we buy any house’ firms protects against agreeing on a sale with an unscrupulous, dishonest, or unqualified operator. Their low offer could come with additional strings attached later.

Negotiate Where Possible

Once an offer comes in from a cash buyer, the seller should not feel pressured into immediately accepting it. Polite negotiation can sometimes increase the initial price, particularly if the buyer shows strong interest or believes they are competing with another firm.

Points to negotiate include:

Sale price – Even just a 5-10 per cent increase makes a difference. Highlight any improvements made since their viewing.
Inclusions – Argue for items like appliances, furnishings or valuables to be left in the sale.
Completion date – Seek a little more time living there post-completion before moving out.
Early access – Request they delay taking possession for maintenance or clearing the property.

With factual evidence on market rates, owners can politely but firmly push back on undervalued offers. However, realistic expectations matter – large increases over a cash buyer’s maximum purchase price point will likely be rejected.

Close the Deal

Once terms are agreed, the sale can proceed swiftly with a ‘we buy any houses’ company. They handle all the legal work and pay fees associated with completion.

Key stages include:

Paying the deposit – This reserves the sale at an agreed price.
Signing the contract – This commits the transaction pending searches and surveys.
Buyers survey – Standard property checks will be conducted.
Mortgage discharge – If sellers have an outstanding mortgage, the buyer will get this repaid.
Exchange – Contracts get legally exchanged, and a completion date is agreed upon.
Completion – The property legally transfers, keys get handed over, and the final payment gets made.

Reputable cash home buyers manage the end-to-end process efficiently. But sellers should stay engaged, ask questions, and ensure they understand each step. Appointing a solicitor to review the contract offers protection too.

With completion cash in hand, sellers can then progress their next property plans, whether downsizing, renting, or buying again.

Conclusion

Selling a property quickly for cash to a ‘we buy any houses’ firm allows distressed homeowners to when facing financial pressure and want to avoid repossession. While an attractive option, considering the market value and negotiating strongly can still result in a better price with these buyers. Vetting potential buyers protects against dubious operators. With the right approach, even urgent sales can yield fair outcomes. Weighing all options before signing a deal remains key.