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News - 7 August 2013

OFT to take action against 'Quick house sale' firms.

Three "quick sale" companies that promise to sell properties for struggling homeowners are to be formally investigated by a regulator.

These companies promised faster sales than could be achieved on the open market for a less than market value price. But the Office of Fair Trading (OFT) is investigating alleged unfair practices that left some sellers tens of thousands of pounds out of pocket.

The service may be used by those wishing to pay off debts, people facing declining health, or those relocating overseas or moving for a new job. It remains niche, representing only 0.5% of UK residential property sales. Total sales are estimated at between £500m and £900m.

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“Quick house sale providers offer to buy houses in as little as seven days, but at a discount - typically between 10% and 25% - of the full market value.”

However, the OFTs investigations, which began in April, uncovered examples of firms exploiting people's difficult financial circumstances. They included:

• Reducing the price at the last minute when the seller was already financially committed
• Making misleading claims about the property's value and the discount
• Stressing the speediest sale of seven days, rather than the typical three to four week timetable
• Inducing sellers to sign up to exclusivity contracts, which carried large severance penalties.

Another 120 firms have received letters from the OFT advising them to check that the way they operate complies with the law.

The OFT has published a series of top tips for consumers considering whether to use quick house sale companies.

They include taking time to find out how the process works, making sure all the information required to make an informed choice about a sale is provided, and making sure providers put promises in writing.

If you need any help and advice on retirement planning or a similar matter don’t hesitate, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar NOW to discuss how ABDS can help in all your financial planning and business advice.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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