Home buying companies - where's the catch?

The last few years have seen the rise of a new type of service for people selling their homes — the property buying company. Property buying companies are essentially cash-funded private investors who allow you to cut through the red tape of traditional house selling methods and sell quickly. They may, like MPG investments also offer other services that the banks, building societies and estate agents are unable to.

- Selling your house quickly may seem like the answer to your prayers - but where's the catch? Those advising against using house buying companies — usually estate agents - are always ready with the answer they offer you less than the market value of your property — but don't be hasty...

Your estate agent may not be giving you the full picture.

It's true that property buying companies make their money by offering less than the market value of a property — we don't attempt to hide that. But the fact is that you may not make any more money by selling through traditional channels.

For some people this comes as a revelation, others are more sceptical - but look closely at the hidden costs and missed opportunities inherent in the traditional property selling route and you'll start to see the bigger picture.

Let's deal with the hidden costs first — the biggest of which is the estate agent's fee, typically 2.5% of the sale price. Add to that the legal costs — at MPG we offer you FREE SOLICTOR’S FEES (if you use our recommended solicitor) or £500 toward the cost of your solicitor (if you appoint your own). Your estate agent won't.

However, it's the lost opportunities that are the most interesting area - and the area which most people overlook.

Estate agents want your business — they'll usually entice you with a high valuation of your property. In the first instance that can be misleading — you may well have an unrealistic assessment of the true market value of your home. Secondly most home sellers are unaware that the standard offer through an estate agent is 7% below asking price! That's £700 you're losing for every £10,000 of your home.

The number one USP (unique selling point) of every property buying company, including MPG, is that we can offer a quick sale, often in less than seven days.

This means that you become an instant cash buyer - look again at that figure of 7% above. As a cash buyer you could expect a saving of that order on your next home.

Now comes the interesting part — quite literally. The average house sale can take months to complete. We've all heard tales of solicitors dragging their heels, the market suddenly going quite (like the dead time over the Xmas period) and buyers suddenly pulling out. And for all those months you wait to complete you'll be paying interest on your mortgage.

A quick sale to a property investor means you save instantly on interest repayments AND you have the certainty of a guaranteed price with no strings attached.

So when an estate agent tells you that they can offer a better price than a property buyer ask them - where's the catch?