Trying to sell your house is tough enough as it is, but trying to sell it fast can seem almost impossible.
There are just so many things that can go wrong or cause delays. And they can crop up whether you're selling with a local estate agent, an online agent, an auction, or selling privately.
But thankfully, selling your house fast isn't impossible. In fact, there's one clear winner that guarantees you a very fast sale.
So what is the fastest way to sell your house?
Selling your home directly to a reputable, well-funded "cash house buying company" is the fastest way to sell your house. Most of these companies will make you a formal offer within 24 hours, and will be able to complete the purchase within as little as 2-3 weeks.
Cash house buyers work very differently to other property companies. This enables them to "short circuit" the normal house buying process, and get the deal done very quickly for you.
A house buying company can be a great option both in terms of the speed they offer, but also the level of certainty too.
House buying companies are the fastest and most certain way to sell, BUT... There are two caveats.
- The price you'll achieve with a house buying company is less than you'd get selling through an estate agent.
- The industry is still poorly regulated and there are a number of disreputable companies operating.
We can help you find the best company (call 0330 223 5568 and have a formal offer within 24 hours).
In this article we'll compare house buying companies to your other options. We'll explain how they work, and help you explore whether or not they're the right option for you.
1. House buying companies: The fastest way to sell
Selling your house directly to a cash house buying company means being able to complete your sale in as little as 2-3 weeks.
This makes it a great option if you're repairing a broken chain, relocating, getting rid of an unwanted investment property, or simply looking for a fast and convenient way to sell.
But how does this compare to the time it takes to sell through an estate agent, or by auction?
1.1. House buying companies vs estate agents
How long does it take to sell through an estate agent?
According to data from TheAdvisory.co.uk's "Time To Sell" benchmark study, it takes between 14-23 weeks to sell your home through an estate agent. (This is from putting your house on the market to getting your sale exchanged - which is the point where the sale finally becomes legally binding).
Bear in mind that this is the average - it's not unusual for sellers to wait much longer than 6 months to sell, with many waiting over a year.
Success rate when selling through estate agents
Unfortunately, even if you're extremely patient when selling with an estate agent there's still no guarantee of success.
According to market research by Jefferies, a financial services company, estate agents only succeed with about 51% of the properties they put to market. The rest are eventually withdrawn by the seller.
You can read more about their study on here on Sky News.
How do estate agents compare to house buying companies?
By comparison, genuine house buying companies can complete in as little as 2-3 weeks. There's no waiting to found a buyer either; they are your buyer. Essentially, you have a 100% chance of success.
Selling to a cash house buyer is a faster, and more reliable way to sell than selling with an estate agent. This comparison table shows you through the main points of difference.
While working with the right property buying company can guarantee you a fast and easy sale, unfortunately this speed and certainty comes at a cost.
You should expect to achieve a selling price of 80-85% of your property's value. Obviously you'll have no fees to pay and this somewhat cushions the reduction, but it's still significantly less than you'd get selling through an estate agent.
1.2. House buying companies vs auctions
For certain types of properties, I'm a big fan of selling by auction. They can be a great way to sell your home.
In fact, check out our article on 17 benefits of selling your house by auction for some of the key benefits.
However... They're still not as fast, or as certain, as selling directly to a house buying company.
How long does it take to sell through auction?
When selling by action:
- It takes a 2-4 weeks to get set up for the auction,
- Then your house will be marketed for about 3-4 weeks.
- After that, the auction will take place.
- At the end of the auction the buyer pays a hefty deposit or reservation fee, and is legally committed to the purchase.
So in total, with auctions it takes about 6-8 weeks to get a legally binding sale. It's much faster than the estate agency option, but slower than the 2-3 weeks a house buying company can offer.
Success rate when selling by auction
We've covered that estate agents only give you a 51% chance of selling. The success rate when selling by auction is higher.
We analysed monthly data from EIG, the industry standard for auction information. The data shows that around 78% of properties that go to auction sell successfully. Learn more about auction success rates at the link below.
Related: Do houses at auction usually sell?
Again, if you accept an offer from a genuine house buying company there's a 100% success rate. You've already found your buyer, so there's no risk of struggling to sell.
Cash house buyers vs property auctions
So selling to a house buying company offers greater speed and certainty than selling by auction. But again, it can come with a compromise on price.
In a previous article, we tried to answer whether houses sell for less at auction. We found that they can sell for as little as 70% of their market value, but can sell for as much as 10% more than market value. The average is about 85-90% of market value when selling by auction.
House buying companies will generally purchase for 80-85% of market value, so there is still a hit on the price.
There are still a range of benefits of selling to a house buying company though. This is especially true if if certainty, flexibility and convenience are important to you.
Should you sell "problem properties" to a house buying company or via auction?
If you feel like a house buying company could be the right option for you, there's one big caveat I'd add.
Selling "problem properties" to a company can seem like a great idea because, as they all say, "we buy any house". In other words, they aren't going to be put off if your home has a serious issue.
HOWEVER, these companies will often ultimately sell your problem property at auction. Here's an example of how this would look. Assume we're talking about a property with subsidence:
- Property would have been worth £200,000 without subsidence.
- With subsidence, it's worth about 20% less, meaning £160,000.
- When selling by auction, you should expect to achieve perhaps £150,000-£160,000.
- The house buying company knows this, so they need to buy at 20% less than THAT to make their profit.
- This means an offer from a company at around £120,000-£130,000.
The company will simply put the property into auction, and expect to sell it for £150,000-£160,000. This allows them to cover their costs and make a profit.
For you, it means taking a "double-whammy": You take a hit on the price because of the issue, then you take another hit by selling to a house buying company.
So if you want to sell your "problem property" rather than wait to fix any issues, auction is the way to go. You'll likely get 20% more than selling to a house buying company.
2. How do house buying companies purchase so quickly?
Selling your house the traditional way is such a long and tiring process. But everyone has to go through it. So it seems crazy to think there could actually be a faster way out there.
So how do cash house buying companies do it, when no one else is?
There are six main changes they've made to the house buying/selling process. These effectively allow them to "short circuit" the process, and buy in timeframes that the rest of the market can't compete with.
- They buy from you directly. This means no dealing with estate agents, waiting for viewings to be booked in and take place, negotiating over offers, dealing with unqualified buyers, or waiting for lengthy chains.
- They have their financing ready. Because they'll either be buying with cash or with a large commercial financing facility, they won't be waiting on mortgage lenders like ordinary buyers do. They certainly won't have to sell their own house to raise the money for their purchase like many normal buyers.
- They have an experienced team. This allows them to make good decisions quickly, and then stick with them. They can also work around complicated legal issues quickly. Finally, they'll be more comfortable taking out insurance policies to sidestep a lot of the problems that delay normal house sales.
- They offer quickly. No need to wait for viewings or serious offers. They carry out a thorough valuation quickly, then submit their offer the same day.
- They use the best solicitors. Fast completions are crucial to their business, so they'll have long-standing relationships with fast, proactive solicitors who do everything by email. (No waiting on the post for important documents!)
- They're service-focussed. Because their acquisitions are higher-value than normal estate agent sales, they'll invest more time in the service they deliver for you. This means more communication. This not only keeps you feeling up-to-date and in control, it also means any issues are flagged up and resolved quickly.
3. What are the downsides of selling to a cash house buying company?
We've covered that house buying companies offer an unmatched level of speed and ease when it comes to selling. Unfortunately there are two major downsides to consider.
1. House buying companies offer a reduced price
Although you don't have any fees to pay, a genuine house buying company will only be able to offer you around 80-85% of the market value for your home.
By buying for a discount and then trying to resell the property for its full value, they're able to cover their costs and make a profit.
Because of the heavily discounted price, this can make it a very expensive option and it isn't the right option for most sellers.
Genuine companies will offer a free valuation though, and there's not cost to receive an offer. So finding out what an offer looks like can be worthwhile.
2. Poor regulation and some dodgy companies
The other big drawback is how poorly-regulated the industry is. Bad practices are absolutely rife and there's very little oversight.
The National Association of Property Buyers (NAPB) were formed in 2013 after a string of complaints against home-buying companies. But unfortunately, as outlined in paragraph 6c of their code of practice, they still allow the use of "option agreements" (also known as "purchase agreements"). These are complicated legal documents with serious implications, which some companies routinely tie customers into without them taking any legal advice.
That's not the only issue, but it's a prime example of how even the regulators have failed to impose strict enough requirements on companies.
Complaints against house buyers
It's not just the NAPB's fault though. Unfortunately, most customers don't write formal complaints after a bad experience. This means that the NAPB's hands are largely tied when it comes to enforcement. The same is true of the Property Ombudsman, who have a code of practice for property buying companies but are rarely made aware of infringements.
This shouldn't all put you off using one though. There are a few simple steps you can take that'll help you avoid the "bad apples", and make sure you work with the genuine, reputable companies.
Get an offer from a genuine house buyer
If you want a quote from a house buying company, we're producing new articles soon that will walk you through how to find the best and most reputable house buying companies.
In the mean time, we can point you in their direction directly. We've been around this industry a long time and know the most reputable players (and the ones who'll pay the highest prices).
Call me on 0330 223 5568 and I'll introduce you to the right companies.
4. Should you use a house buying company?
House buying companies are the fastest and most certain way to sell your house. But should YOU use one?
For most people, the answer should be "no". In today's property market, most people simply can't afford to take a 15-20% discount on their sale price.
But what if you can?
If the property doesn't have a very large mortgage against it and you can afford to sell it for a discount, it can be a really good option. Especially if you feel that time and a convenient service is perhaps more valuable to you than getting the highest possible price for the property.
As we've covered, the speed and certainty it offers is unmatched. Some examples of types of homeowners who use the service a lot include:
- Chain repair. If your sale has just fallen through and you don't want to lose your onward purchase, home buying companies can be a great option. You may even be able to get other parties in the chain to absorb some of the reduced price.
- Relocation/Emigration. If you have a deadline for a relocation then a drawn-out sale with an estate agent may not be an option.
- Separation/Divorce. Even though the price you'll get is lower, many in this position feel that it can be worth it to avoid a drawn-out separation.
- Inheritance. Selling directly to a house buying company helps settle an estate and help find closure more quickly.
- Downsizing. If you want to move with as little stress as possible, the sheer convenience offered by home buying companies can make them a great fit to help with a downsizing move.
Ultimately, the answer depends on your priorities.
If you're thinking about selling to a home buying company then it's up to you to decide how you feel about the compromise you'll have to make on the price, versus how valuable the speed and certainty is to you.
By Matthew Cooper, Founder of Home Selling Expert