Cash buying property scheme penalised for false advertising
Recently there has been regular advertising campaigns from companies that claim to buy any house for cash, from a property seller. If your conveyancing client was to use such a scheme, do they really know the terms and risks of selling in such a way?
It is now being reported that companies that buy property directly in some cases are misleading consumers with false advertising. Could you spot the pitfalls?
The Advertising Standards Authority have deemed the recent "We Buy Any House" claims as misleading. Whereas the consumers assume the company buys property directly from the seller, according to the latest reports, cash investors are actually required. It seems this quick-fix home selling scheme may just be an estate agency in disguise.
On the We Buy Any House website, there are apparently claims that economic or time setbacks lead to property buyers seeking businesses that pay cash. This is a crucial downfall and if your conveyancing clients have any misgivings during the process, they should be advised that transactions take a number of weeks and months in order to have a stable completion. Cutting corners certainly isn’t the best route to effective home selling.
In this year’s YouGov Conveyancing report, half of the residential property sellers said it was "very important" to them that the conveyancing service they choose offers a quick turnaround. A vast number of sellers (40%) also expected the whole process to take less time, and more than half (51%) expected the transaction to take just one or two months.
Effective communication from the start is vital for keeping your clients protected and fully informed. This will ensure they are safe in the knowledge that their property transaction is being handled in the best way possible, and though it may take longer, it will eventually lead to a more stable completion.
The We Buy Any House site also says their company should not be compared to estate agents, as they buy the property directly from the seller. This means there are no estate agency fees, with free legal advice, and the initial offer from them is what the seller will receive when the transaction is complete.
According to the Advertising Standards Authority, such claims are in breach of the CAP Code (Edition 12) rule 3.1 (Misleading advertising) and the authority have ordered the company to remove these marketing statements.
It’s been revealed that companies who claim to buy properties for a quick transaction could be offering much less than the true value and usually take the same amount of time than the typical selling process.
Have any of your conveyancing clients experienced such a company? If so, was it a successful transaction?
What recommendations would you make to your clients to speed up the residential property selling process?