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One popular option for selling almost any category of freehold or leasehold home is getting in touch with a homebuyer, as these are companies that can usually complete a sale in few short weeks. This guide outlines what to expect when selling this way, and details three alternative ways that you might want to use instead to get potential buyers interested in your property.
- What does it mean to sell a house or flat to a house buyer?
- The steps involved with selling property to a homebuyer
- Pros and cons about using a house buyer to sell your property
- Option 1: Selling with an estate agent
- Option 2: Selling with a property auctioneer
- Option 3: Selling without any assistance
- Top queries about alternatives to selling property to a homebuyer
What does it mean to sell a house or flat to a house buyer?
If you are the owner of a leasehold or freehold residential property like a flat or house and you would like to sell it, you will need to choose a strategy for how you want to find a buyer. And one of the most popular methods for a stress-free, streamlined sell is selling to a homebuyer.
For this guide, homebuyers refers to companies like LDN Properties that are honest zero-commission quick home buying businesses. They make competitive and swift offers for buying practically any variety of house or flat, including “problem” properties with structural damage or other flaws and no matter the age, condition, location, shape, size, type or other features of the home.
LDN Properties, for example, launched in 2003 and since that time it has bought and made offers on a long and ever-growing list of homes throughout the UK, including but not limited to houses with lapsed planning permission, properties that have a defective lease, duplex flats, homes with a flooded basement, underpinned houses, properties with an ongoing boundary dispute, flats that have service charge arrears, homes with reinforced autoclaved aerated concrete, houses that have drainage problems, properties with red ash and many other varied situations.
These companies provide a direct one-on-one transaction with the homeowner is selling. That means you won’t experience a potentially difficult property chain where the successful sale of your house or flat is dependent on the buyer selling their property. These chains can often be complicated and can fall apart, as The Times says.
And they have other welcome aspects, such as not charging sellers any commission and generally being able to finalise the purchase of most homes within a few weeks. But homebuyers can also have certain downsides, as a later section of this guide explains.
If you’re uncertain about selling your property to a homebuying company, you have three main alternatives – you could sell the home using the services of an estate agent, you could try your luck with a property auction, or you could sell without the help of one of these third parties.
Keep reading this guide to learn about the ins and outs of selling your house or flat to an honest homebuying company like LDN Properties, as well as key details about the other options.
As you’re browsing this guide, bear in mind your main priorities with selling, including your willingness to pay any commission on the sale of your home, how fast you want to find a buyer and the goal price at which you would like to sell. Compare these factors against all of the different options and you will be able to find the one that most closely matches your needs.
The steps involved with selling property to a homebuyer
Pros and cons about using a house buyer to sell your property
When trying to decide whether to consider one of the alternative methods for selling your property instead of using a homebuyer, it can be helpful to learn about the benefits and drawbacks of selling to a homebuying company. Some of the advantages include:
Sell problem homes: Quick buyers are well known for making fair and fast offers to purchase even so-called problem properties that might be hard to sell on the open market via an estate agent or auctioneer, as the HomeOwners Alliance notes. That can be a great relief for those owners who don’t have the funds, time or interest in resolving any such issues first.
Get a speedy sale: Another great perk of homebuying companies is that that are renowned for moving quickly to complete all the necessary steps involved with purchasing your property. It should only be few short weeks in total from the time that you first get in touch with a homebuyer through to the period when you exchange contracts and receive the full sale proceeds, which typically makes selling this way by far the most rapid option available.
Avoid paying commission: For many homeowners, keeping their selling expenses as low as feasible is a top goal when trying to find a buyer. Thankfully, many legitimate homebuyers like LDN Properties commit to never charging sellers any commission when purchasing their properties. This means that you are able to plan on getting the total proceeds from the sale of your house or flat, without having to worry about commission increasing your costs.
Whilst the above benefits can all be strong reasons in favour of using a homebuyer to sell your property, there are some potential downsides that you may encounter with certain companies:
Taking a lower offer: It’s possible that certain homebuyers may give you a lower offer for your home than you might be able to get through other selling methods, because they might think you are eager to sell as fast as possible and therefore open to accepting a reduced offer. If you think the price you’re quoted is too low then you can simply continue to ask for offers from other homebuying companies.
Charging hidden fees: One of the top draws for owners that select homebuyers is that these businesses typically promise to never charge commission, which means that you can count on receiving the full sale proceeds. But you could find certain homebuying companies that will still charge you other administrative fees for the sale even if they don’t directly require that you pay them commission, and this can cause your overall selling expenses to rise.
Option 1: Selling with an estate agent
Estate agents are a traditional way to sell a home and they do the bulk of the work needed to find a buyer. This starts when they prepare a listing that describes your home and features photographs of the outside and inside, which they then advertise in local newspapers, online and in their office. They will also schedule viewings for people to tour your home, and they will hear serious offers from potential buyers, ideally guiding one to the exchange of contracts.
Whilst avoiding having to do this work yourself can help with reducing your stress when selling, estate agents nevertheless might take a very long time to sell your home. You should be prepared for waiting many months, or even a full year, before you get a genuine offer.
A major risk when selling with an estate agent is that a buyer could make an honest offer for your home but then later change their mind and cancel it. This would prompt the sale to collapse and force you to restart your search for a buyer. And unless contracts have already been exchanged, a potential buyer can make an offer then rescind it any they won’t be subject to any penalties.
You might also experience an issue with some estate agents that will tell you that your property will sell at a certain high and attractive price, despite them secretly understanding that buyers will only make offers at much lower values. This trick aims to get you to agree to sell your home using the services of that estate agent, because they will then make a profit from whatever commission they get to charge you in the even that they’re able to sell your property.
It’s quick, free and easy to avoid falling for this particular routine – first, just ask several estate agents to give you a free, zero-obligation quote of your home’s value, and second, visit Rightmove, Zoopla and other property sales websites and look up the current and past sale prices of homes that are similar to yours. Finally, calculate the average value among all of the prices and this should be a better estimate of the price at which you may be able to sell.
When you sell with an estate agent, they will also charge you commission that pays for the work that they put in to find a buyer for your property. Many estate agents set this fee within range between 1.15 percent and 1.40 percent of a home’s final sale price, and it will increase your total expenses because the commission is subtracted right away from the sale proceeds. If you are trying to reduce costs when selling then you should review the zero-fee options.
Option 2: Selling with a property auctioneer
Auctioneers also handle most of the effort needed to sell your home, because they will create and advertise a listing for your property and host the auction, where people can place ever-increasing price bids on the home, and they’ll oversee the completion of a successful sale.
You will be asked to choose the lowest price at which you are comfortable selling your flat or house, and this is known as the reserve price. Take time to calculate a price that should generate some profit for you from the sale, even after the auctioneer has subtracted their commission from the eventual selling process. If you do not, you run the risk of selling your home at a loss or selling breakeven at a similar price to what you paid for it.
The auctioneer might ask you to choose from two ways to sell your home, known as the traditional method and the modern method of auctioning a property.
The traditional method is the one most people will be familiar with, and it involves the auctioneer marketing your listing for several weeks or months. This is done to hopefully get buyers interested in bidding on your home ahead of the auction, which will be held on a set day. On that day, people will be able to place bids on your property for a very limited amount of time, and when the auctioneer says “going, going, gone” and bangs their gavel the auction is over and the top bid is the winner, and therefore the person that will be purchasing your property.
The modern method differs in that your listing will be advertised for a specific number of weeks or months and from the start of that time, people can place bids on your property every day of the week, 24 hours a day. When the listing reaches its expiration date, the top bid at the precise moment the listing ends is the winner of the auction and your property’s legal buyer.
If you get just one bid on your property at the reserve price, this is considered a legally binding agreement that you will sell the home to the bidder – and in the event that you change your mind and try to walk away from the sale, they could sue you to enforce it. It’s another reminder about the importance of selecting a reserve price that is designed to produce a profit for you.
There are several potential problems associated with property auctions that you should discover before you make a final decision about which approach you want to use to sell your home.
One notable disadvantage with selling at an auction is that you will need to pay commission if your property sells, and this will be deducted immediately from the sale proceeds, adding to your overall costs. Usually, auctioneers charge this fee at 2.5 percent of a home’s final auction sale price but the actual rate of commission can be higher or lower depending on the company.
You could inquire with individual auctioneers about the possibility of either reducing the amount of commission that you have to pay, or getting the winning bidder to pay some of your costs but just remember that the auctioneer is under no obligation to agree to such outcomes.
Another negative aspect of selling at an auction is the amount of time it can take, including long waiting periods, beginning with a wait of many weeks or months between the day that you select this selling method and that the day on which the auction happens. Then, if your home does manage to sell at the auction, the buyer often has about a month to complete their tasks to finalise the purchase of your property, including signing the mandatory legal documents.
It’s also possible to ask individual auctioneers whether they might be willing to set a tighter deadline for the buyer to finish these actions, which could help speed up the sale of your home. But beware that certain auctioneers may give the buyer even more time than a month.
Option 3: Selling without any assistance
Selling a home on your effectively puts the burden on you to handle all of the tasks that an estate agent or an auctioneer would have done in trying to find a buyer for the property, as MoneySuperMarket explains. This can quickly become very stressful and time-consuming work.
You will need to put together a listing for your property, decide how you want to advertise it to bring it to the attention of prospective buyers, organise viewings for anyone interested to tour the interior and exterior of your house or flat, and hear offers from serious buyers.
This approach to selling is only suggested for people that have prior experience with selling properties on their own, or that have a suitably skilled friend or family member that is willing to help them at no charge with finding a buyer. If neither of these situations apply to you then you could be looking at waiting more than an entire year before you are able to sell.
Remember also that even if you finally get an offer on the property, the buyer could change their mind and later cancel it. This would lead to the sale falling apart, adding much more time to your selling schedule because you will then have to begin again with trying to find a buyer. And the person that rescinded the offer won’t face any penalties if contracts are not yet exchanged.
Perhaps the only clear benefit of selling without any help from an estate agent or an auctioneer is that you will not be required to pay one of these third parties any commission, which can help with lowering your selling costs. But this initial saving might be eliminated by the money that you may need to spend on advertising your property’s listing and various other tasks.
Instead, you should think about selling your property to a quick homebuying company like LDN Properties because they will also help you avoid fees, as they promise to never charge homeowners any commission when purchasing their properties. And you will get an extra advantage of securing a much faster sale, because many homebuyers can finalise the purchase of a property within a handful of weeks, including the time required to pay the owner their full proceeds and also to complete the other important final step of exchanging contracts.
Top queries about alternatives to selling property to a home buyer
LDN Properties is a legitimate homebuyer and we often get questions about our process for purchasing homes, as well as alternative options, so here are our answers to them:
Your top questions when considering selling to a house buyer
Although the word homebuyer can mean many things, generally it refers to a quick property buying company. These businesses, for example LDN Properties, have the funds available upfront to immediately purchase almost any freehold or leasehold house or flat, and they are usually able to finalise the sale within a few weeks after you first contact them.
Start by finding a company you’re interested in selling your home to, then call then and you’ll be given an initial offer for the property that you will have at least a week to consider. If you accept this offer, someone from the company will inspect your home ahead of them making a final offer, and then all that’s left is to exchange contracts and pay you the full proceeds.
There are several notable advantages you’ll experience when selling a house or flat to a homebuyer, in particular that it’s often the speediest way to find a buyer because it will only take a handful of weeks to finalise the sale of the property. Another great incentive for selling this way is not having to pay any fees when you choose a legitimate no-commission homebuyer.
As with any industry, there are a limited number of homebuyers that might have some problems associated with them, for example companies that will try to pressure you to accept a lower value for your home than you might be able to get elsewhere, because they know you’re in a rush to sell. Other businesses may include hidden fees that will add to your expenses.
You will not need to do much work when selling via an estate agent because they will take on the duty for doing most of the tasks, including creating and advertising a listing, organising viewings and hearing offers. But they will charge expensive commission for this work, and selling this can also take many months or even more than a year in some situations.
This is a risky step because you might not get any bids on your home at the auction, so your property won’t sell and you would have to then start over with trying to find a buyer, delaying a sale even further. When you sell this way, you will also have to pay commission to the auctioneer and this will increase your costs because it’s taken out of the sale proceeds.
If you sell on your own, this means that you will be responsible for all of the steps needed to attract a buyer to the property, and this can quickly become a very time-consuming and highly stressful situation. Remember also that you even though this method allows you to avoid paying fees, you could still have significant costs, for example with advertising your home’s listing.
