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Original poster

Selling to a property company

34 replies

MrsMontyD · 04/08/2022 13:20

I'm very inexperienced at buying and selling houses (bought my current house as a FTB without it going into the market) and some advice would be appreciated.

I'm not looking for advice on whether we should sell to a property company please, just on the process./risks.

DP and myself have a house each to sell and we're looking to buy one between us, as soon as possible. We have offers from a company that brokers for property developers/landlords, for both properties that are pretty much the full market value, especially when you consider there would be no EA fees and they pay legal fees.

This works potentially for DPs house because he can move in with me and it gets us quickly to the position of having one house to sell and one to buy. They've sent us both an agreement to sign, with a date in for completion in 3 months, subject to contract, which isn't necessarily an issue for DP because frankly the sooner he moves in with me the sooner we stop paying two lots of utility bills etc.

Am I right in thinking that this agreement is effectively just a formal acceptance of the offer so they can undertake the survey etc.? Is it usual to sign an agreement at this stage in a house sale?

The offer for my house is also at a price I would accept but we haven't even viewed any properties to buy yet and I'm just concerned about the process and potentially having to move out before we have somewhere to go to, despite assurances that the completion date is fluid and it's on the agreement as 3 months because they have to put something. Any advice on the process and legal implications appreciated.

OP posts:
HotDogKetchup · 04/08/2022 13:24

Solicitor here specialising in property here. It’s absolutely impossible to determine what the contract is about without having seen the contract. Please get legal advice.

Selling to a company doesn’t make any difference to you as a vendor in terms of the legal/sale process. So I’d be wary of any additional agreements you’re asked to sign. I’d want to know what obligations and penalties there are for this prospective completion date?

HotDogKetchup · 04/08/2022 13:30

Just to add - it’s unusual to be asked to sign an agreement at this stage. Save for reservation agreements for the purchase of a new build.

Original poster
MrsMontyD · 04/08/2022 16:14

Thank you, that was my concern.

OP posts:
Original poster
MrsMontyD · 04/08/2022 18:49

I'm assuming they're wanting to make sure sellers are serious before they start paying out for a survey and legal fees.

OP posts:
HotDogKetchup · 04/08/2022 19:00

MrsMontyD · 04/08/2022 18:49

I'm assuming they're wanting to make sure sellers are serious before they start paying out for a survey and legal fees.

Nothing is binding before exchange of contracts. That’s how property law works in the UK.

Orangesare · 04/08/2022 19:03

I have heard about companies getting an agreement signed early which then forces you to drop the price later. You really need your own solicitor.
you may also be better hiring an estate agent and explaining that you wish to price it realistically for a quick sale.

Crumpleton · 04/08/2022 19:17

If you do go ahead and want to sign with a property company just make absolutely sure that the final, not open to any movement whatsoever agreed price is written in any contract.

HotDogKetchup · 04/08/2022 20:39

Crumpleton · 04/08/2022 19:17

If you do go ahead and want to sign with a property company just make absolutely sure that the final, not open to any movement whatsoever agreed price is written in any contract.

That’s the purpose of exchanging.

Original poster
MrsMontyD · 04/08/2022 21:30

The offer price is written in the agreement they want us to sign, but it's subject to contract, which is subject to a survey confirming the property is as described, if they were to lower the offer price surely this agreement would be invalid?

I'm going to get it checked

OP posts:
BakeOffRewatch · 04/08/2022 21:33

Yes these companies are known for lowering the price just before exchange. In your situation you’d be able to tell them to do one, but people in chains, or moving for need, can’t. I had loads of letters through the door from them and looked up reviews and so on. There’s a couple of mumsnet threads by company name. Don’t sign anything without a conveyancer or solicitor checking it.

Original poster
MrsMontyD · 04/08/2022 21:38

We would definitely tell them to do one, the only reason we're considering it is the potential speed in getting one house sold.

OP posts:
Crumpleton · 04/08/2022 22:21

MrsMontyD · 04/08/2022 21:30

The offer price is written in the agreement they want us to sign, but it's subject to contract, which is subject to a survey confirming the property is as described, if they were to lower the offer price surely this agreement would be invalid?

I'm going to get it checked

The offer price as you say is subject to contract and a survey confirming the property is as describe...anything can be picked up on which the surveyor is not satisfied with which can contribute to a lower offer.
We've recently sold a property that was over 100 years old and the surveyor said the roof wasn't in good condition which for the properties age was understandable. There were various other things that were picked up on, again nothing as bad as written in the report.
Fortunately our buyer could see it was relatively new and receipts to prove it was renewed within the last 5 years backed it up.
So no, subject to contract doesn't mean it's a dead cert it's going to get the full offered price.

Crumpleton · 04/08/2022 22:50

Equally a company that is acting for a developer that wants to actually develop the property will have it written in a contract that the offer could be subject to getting planning permission if they want to knock down/rebuild/expand.
If this is the case you could be waiting sometime.
It's very rare a company will buy at the market rate to sell on for the same price...they're in it to make a profit.

LunaAndHerMoonDragons · 05/08/2022 06:35

MrsMontyD · 04/08/2022 21:30

The offer price is written in the agreement they want us to sign, but it's subject to contract, which is subject to a survey confirming the property is as described, if they were to lower the offer price surely this agreement would be invalid?

I'm going to get it checked

No one can tell you for sure. The offer could be written as X price with things in the terms and conditions that form part of the contract that they could reduce the price for A,B,C reasons after survey. I don't know how binding it would be. More likely as others have said you could get to exchange and they'd suddenly cut the price and refuse to exchange if you didn't agree. Wouldn't effect you so much in your situation. It could be a completely meaningless piece of paper, but I wouldn't sign without a conveyancing solicitor reading the whole thing first and telling you to what exactly it means and what you and they are bound by. .

MrsFortSQ · 05/08/2022 07:09

Please get legal advice op.

When I met my DH we both had our own properties, so I put mine up for sale with an estate agent but as I wanted to get it sold quickly I cancelled the EA and went with a property buying company. They agreed on the price which I was very pleased with, did the survey etc - all fine. The day before we were due to exchange they called me and said that the survey showed some cracks in the walls which they said meant subsidence. The offer was cut in half. I was gutted but despite heavy pressure from them to continue I pulled out and instead put the house up for auction where it sold for a lot more than what their final offer was.

Tread carefully with these firms, I didn't know that this was a well known tactic. Get independent legal advice, and possibly look into a property auction with a reputable firm if you looking for a very quick sale.

Good luck!

Endlesslypatient82 · 05/08/2022 07:11

I'm very inexperienced at buying and selling houses

you did not need to state that Op

it is very very evident from the detail of your post.

get legal advice asap.

and I would urge you not to sell to a property company

Original poster
MrsMontyD · 05/08/2022 19:12

We're going to take legal advice and discuss it further, it's ultimately DPs decision as it's his house we need to sell first, I've decided my house will definitely go on the market.

From comments on this thread and what I've read elsewhere the main issue with these companies seems to be that they start with a good price and reduce it later in the process, as DPs house won't be in a chain we would simply back out and put the house on the market.

I'm hopefully speaking to a solicitor early next week.

OP posts:
Endlesslypatient82 · 05/08/2022 20:01

Op how long have you been with your partner? Do you both have children or just you? There is a real sense of rushing from your post

Original poster
MrsMontyD · 05/08/2022 20:57

Endlesslypatient82 · 05/08/2022 20:01

Op how long have you been with your partner? Do you both have children or just you? There is a real sense of rushing from your post

We've been together 3.5 years so it's not a new relationship, no dc together.

I'm keen to move into a bungalow as soon as possible for health reasons, also we're spending money every month running two properties and time, energy and fuel costs of moving between two houses, we're both ready to move into a new phase of life.

We know a few people who've moved recently and while they've got a buyer quickly the whole process has been taking an average of around 7 months, so we could be looking at 7 months to sell DPs house on the open market before I can start to sell mine, so up to 14 months before we can move.

Selling DPs house to a property company, assuming we get the price they've offered means we could have his house sold and mine on the market within 2/3 months.

OP posts:
NotDavidTennant · 05/08/2022 21:09

These companies make money by buying houses below market value and then flipping them for profit. They will lower the offer at some point.

Original poster
MrsMontyD · 05/08/2022 22:34

I've also got a fixed rate deal coming to an end on my mortgage next year, so I'd ideally like to sell before then, we're expecting to be able to buy the new property outright.

OP posts:
Endlesslypatient82 · 06/08/2022 05:37

Single parent here too oP

and if I were you, and was combining homes with someone i had known 3.5 years (I wouldn’t but that’s me!) I would have a watertight will and pre nup if you marry, regarding how the property will be dealt with and the split of interest in the event of a rel breakdown so yours and your children’s interests are protected

Original poster
MrsMontyD · 06/08/2022 06:06

Endlesslypatient82 · 06/08/2022 05:37

Single parent here too oP

and if I were you, and was combining homes with someone i had known 3.5 years (I wouldn’t but that’s me!) I would have a watertight will and pre nup if you marry, regarding how the property will be dealt with and the split of interest in the event of a rel breakdown so yours and your children’s interests are protected

We've discussed this, the new property will be held as tenants common and we will make wills pre and post marriage. We both have dc to protect and will be putting roughly 50% of the capital each onto the new property.

I'm quite a bit younger, DP is taking much more of a risk selling his home.

OP posts:
Endlesslypatient82 · 06/08/2022 06:14

Why will he be taking more of a risk if a 50/50 tenants in common split?

Endlesslypatient82 · 06/08/2022 06:15

in the event one of you die, do your children remain in their home?

do you have life assurance?

op - 3.5 years for combining your wealth and moving on together, when you have young children is very high risk.