Below market value home sales and firms offering quick house purchases are under investigation by the Office of Fair Trading.
The OFT is concerned sellers do not get a fair deal and end up paying unforeseen charges.
The consumer champion is now demanding 50 quick house sale firms hand over detailed information about their deals.
They are also asking anyone who has sold a home to a below market value (BMV) purchaser to get in touch to tell investigators about their experiences.
The market in quick BMV sales typically involves sellers facing bankruptcy or repossession who want to dispose of a property in four weeks or less.
Buyers in the BMV market typically pledge a 28-day sale in return for discounts of around 30% of the property’s value.
The OFT considers the deals are often unfair to sellers as they have had reports of:
- Unexpected extra fees demanded to make sure sales progress
- Offers dramatically reduced at the last-minute
- Sellers given misleading home values
- Unfair contract terms with extreme financial penalties imposed to stop sellers from selling to someone else
Cavendish Elithorn, OFT Senior Director for Goods and Consumer, said: “Businesses offering quick house sales may provide a useful service for homeowners who need to unlock cash in a hurry. However, they are often used by consumers in vulnerable situations and therefore we are concerned about the risk of consumers being misled and losing out on large sums of money.
“We want to hear from anyone who has used a quick house sale provider, whether they have had a good or bad experience with the business. We will protect the confidence of anyone who contacts us and their information will be invaluable in helping us to build up a picture of the market and establish whether we need to take action.’”
To take part in the BMV investigation, contact the OFT by emailing email@example.com, or telephone 08457 22 44 99.