Quick Sale Property Businesses Squirming at OFT Report

by Mark Alexander

10:12 AM, 7th August 2013
About 7 years ago

Quick Sale Property Businesses Squirming at OFT Report

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Quick Sale Property Businesses Squirming at OFT Report

The OFT have announced that they have written to 120 Quick Sale property businesses advising them to review their practices and also revealed they are to investigate three “Quick Sale” property firms following their review of the quick sale property sector.Quick Sale Property Businesses Squirming at OFT Report

The OFT report on “Quick Sale Property” businesses is very balanced and recognises the need for companies acting with integrity, i.e. a clear and open agenda.

Three announcements which have set off the panic alarms for investors operating “quick Sale” business models are:-

1) The OFT have now issued a guide for Consumers

2) The businesses under investigation for illegal activity have not been named and the outome is uncertain and may even lead to Court rulings which create case law or result in additional legislation being introduced for the protection of consumers.

3) The OFT has also written to almost 120 providers advising them to check that their business practices and contractual terms comply with their legal obligations. Discussions are also underway with businesses in the sector on developing self-regulation.

Practices of concern include:

  • Reducing the price offered at the last minute after the seller is financially committed to the transaction.
  • Making misleading claims about the value of the property or level of discount to be applied.
  • Stressing the fastest possible times to completion (for example ‘seven days’), rather than the more typical times (three to four weeks) on websites and marketing materials.
  • Inducing sellers to sign long-term exclusivity agreements that prevent them selling to other buyers, with severe penalties for breach of contract.

I suspect the OFT will be looking very closely at Google Adwords advertisements too. Below is an example which I have just spotted which mentions both Sale and Rent Back and cash sales in two days!

Quick Sale

Expect a lot of discussion in certain Facebook Groups and forums where “BMV Investors” gather.

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