As a homeowner with property to sell, it’s likely that you are already aware of the most popular methods of finding a buyer. These are, of course, estate agency and auction sales.
You will probably also know that selling via auction is often quicker and more predictable than using online or high street estate agents, as auction events take place on set dates, and - when selling via the traditional method of auction at least - the top bid is binding when the gavel falls.
A standard estate agency sale, on the other hand, can take an average of four months. This approach relies heavily on finding the right buyers, receiving the right offers and avoiding the worst pitfalls of a property chain.
While the use of an estate agent remains the most common method of selling domestic property in the UK, a range of newer approaches is now coming to the fore that may better suit homeowners in certain specific circumstances.
One technique is known as “Assisted Sales” (or AS). This is actually an umbrella term referring to various methods, which we will explore throughout this guide.
So, what is “Assisted Sales” - and why might some sellers opt for this kind of approach? Below, we’ll provide a clearer definition of this home selling technique and explore the various specific options associated with the wider method.
A free and no-obligation cash offer for your house
Broadly speaking, the term “Assisted Sales” refers to a property selling technique whereby a homeowner can sell their house directly to a specialist company or an investor at a pre-agreed price.
The seller can often receive up to - or even beyond - market value for their property using this method, and will not usually have to wait for the completion of a chain or for buyers to express interest.
The precise method used is likely to depend on the requirements and preferences of the homeowner. The main options are:
We’ll explore each of these terms in further detail later on in this guide. First, however, we’ll look into the reasons why a homeowner might choose to go down the route of Assisted Sales.
A free and no-obligation cash offer for your house
In order to understand why this approach may appeal to certain sellers, it may be best to start by exploring its general benefits.
These are as follows:
So, what kind of seller might prefer an Assisted Sale over any other approach? This selling technique may appeal to you if you:
As you can see, there are a number of circumstances in which an Assisted Sale may be a highly beneficial option for a particular kind of seller.
Throughout the next part of this guide, we’ll discuss the different “types” of Assisted Sale in greater detail. In each section, we’ll explain the specific advantages of the method in question - from the perspectives of both the seller and the buyer or investor.
We’ll also investigate the potential pitfalls and drawbacks of every approach. In this manner, you’ll be able to use the information provided in this article to decide which Assisted Sale method is best for you and your property, or whether a different approach may be preferable.
A free and no-obligation cash offer for your house
As we have already mentioned, the term “Assisted Sale” is quite a general one that covers many bases. To this end, some options that fall under this umbrella may be suitable for certain individuals, while others may not.
For example, if a seller owns property with outstanding mortgage payments, an Assisted Sale with a cash advance will almost invariably be more beneficial than one without a cash advance.
For this reason, if you are considering selling your home via an Assisted Sale, we highly recommend reading through the following sections in detail.
If you opt for a “cash advance” Assisted Sale (AS), your first step will be to find an investor, developer or other specialist buyer who offers this kind of service.
You will then draw up a contract with them, setting up the buyer to purchase the property at the end of an agreed term.
This means that - on a specified later date upon which both parties must agree - contracts can be exchanged and ownership will be transferred from the seller (or “vendor”) to the buyer (the investor or developer).
An AS with a cash advance usually works in the following way:
So why opt for an Assisted Sale with a cash advance? Here are some of the top benefits.
It is worth noting that some AS arrangements enable profits from the sale to besplit between the buyer andthe seller of the property.
Naturally, the scale of any possible profit from an Assisted Sale of this kind depends heavily upon the nature, size, style, location and condition of the property that is the subject of the AS contract.
This kind of assisted sale is relatively swift, with contracts usually stipulating a sale period of less than 12 months from start to finish.
Advance equity payout. Using this option means that you will be paid a portion of your equity stake in the property in advance of the sale process completing. This means that the seller can get hold of cash for their property fast.
As the seller of a property at the centre of an Assisted Sale, you will be able to pass all related property management duties - and charges - over to the buyer as a part of this agreement.
This includes:
Of course, this protects you from accumulating expenses throughout the period stipulated by the Assisted Sale contract.
It is worth noting, however, that any mortgage payments made by the buyer will be deducted from the property’s final sale price, reducing the eventual sum received by the seller.
Who Might Prefer an Assisted Sale with a Cash Advance?This type of sale is a superb option for homeowners who need a cash injection quickly.
It’s also great for those who are trying to part with property that has structural problems or any other issue that would otherwise make it difficult to sell quickly for a good price.
Furthermore, this approach works well for sellers who want to add value to their property but do not have the time, funds or capacity to tackle changes and improvements themselves.
Who Should Avoid This Option?Assisted Sales with cash advances may be a less appealing choice for sellers who do not wish to cover a 3% Stamp Duty levy. This will be charged if the seller moves into a new property before the buyer is able to sell the home at the centre of the AS.
Moving at this point will, of course, mean that they are the owner of two properties at once.
Stamp Duty can be reclaimed after the property sells. However, this may cause cash flow issues for some individuals.
It is also worth noting that a sale of this kind is reliant on the actions of solicitors and mortgage lenders.
AS is still a fairly niche option, which means that some legal specialists may lack sufficient knowledge or understanding of the subject. This may lead to lengthy hold ups or errors when drafting contracts.
Any seller will also need to apply to their mortgage lender for permission to enter into a contract of this kind. This means that lenders who are cautious about using less common or “traditional” methods of sale may refuse their consent - and the Assisted Sale will not be able to go ahead.
A free and no-obligation cash offer for your house
This type of Assisted Sale is very similar to the option described above. However, as its name suggests, the seller will not receive an advance equity payout.
The buyer will only need to pay an “option fee” - which may be as little as £1. Some amount must change hands in order to make the contract legally binding.
This step is perhaps more symbolic than practical; it shows that the buyer has “purchased” the option to take on the property themselves.
Most commonly, once the contract is drafted and signed, the buyer will require full access to the property almost immediately - usually in an empty state - so they can begin renovations or similar work.
Sales of this kind offer very similar benefits to the cash advance option - particularly speed and the potential for profit, as described above.
However, there are further benefits to an AS without a cash advance, including:
When you sell via this method, Stamp Duty will not need to be paid until the buyer sells the property on. It’s important to note that this tax will be reclaimable within two years of that sale.
Who Might Prefer an Assisted Sale with a Cash Advance?Sellers who opt for this form of AS are usually individuals who have already moved out of their house, or whose property is currently empty for any other reason
For example, they may have received an additional home via probate and wish to sell it as soon as possible - perhaps because they cannot maintain or renovate it.
Investors often prefer empty property for this kind of AS because of the “quick turnover” typically required
Any home sold via AS without a cash advance is likely to sell for a good profit, as the investor will usually set about making improvements straight away. For this reason, a sale of this kind is perhaps best suited to property that requires a small amount of renovation or updating
However, Assisted Sales without cash advance are suitable for homes in almost any condition.
This option will also work well if the seller does not have outstanding mortgage payments on the property.
Who Should Avoid This Option?The main downside to an AS without a cash advance is the potential for cash flow issues. As the seller won’t receive any cash upfront besides the option fee, they will need to wait until the property sells in order to receive a payout.
The same goes for the Stamp Duty charge. While this cost is deferred until the point of sale, there will still be a two year wait until it can be reclaimed.
A free and no-obligation cash offer for your house
A Lease Option sale - also known as a Purchase Lease Option or PLO - is occasionally grouped in with other Assisted Sale options, but is sometimes considered to be a separate approach entirely.
For the purposes of this guide, however, and due to the many similarities between the different methods, we have chosen to include this option.
A Lease Option is very similar to an AS with cash advance, but the process tends to take longer than 12 months to complete. The final sale date that is pre-agreed as part of the contract is often between three and five years in the future, though, by law, this can reach up to 18 years.
As is the case in the method detailed above, this contract will be enforceable by law as long as money changes hands - even if it is as little as £1. In completing a transaction of this kind, the buyer will be purchasing the option to buy the property.
It is worth noting that the word “option” means exactly that. A contract of this kind means that the buyer is not legally obligated to go through with the purchase, but that they have the exclusive right to do so at the end of the specified period.
When entering into an agreement of this kind, the seller and the buyer will confirm a “strike price” (or “exercise price”), which is a fixed amount for which the seller may purchase the property before the option period draws to a close.
As in an AS, once this agreement is in place, the buyer (or the “option holder”) takes control of the property according to the terms of the contract - including mortgage payments, bills and maintenance costs.
A Lease Option often sees the seller receiving monthly “rental payments” from the buyer as opposed to being paid a portion of the home’s equity in advance. These payments will be made throughout the period stipulated in the contract.
Often, the buyer may rent out the property to an “undertenant” in order to make a profit during the option period.
As we have mentioned, when it comes to the eventual sale, the buyer reserves the right to change their mind.
For this reason, the possibility remains that they will not take on full ownership of the property at the end of the pre-agreed term. If this is the case, the option will expire, permitting anyone to make an offer on the property from that point onwards.
Of course, it is still possible for the seller and buyer to draw up a new contract with revised terms and start afresh after the previous one has expired.
As we have mentioned, a process of this kind usually sees the buyer taking on responsibility for all expenses relating to the property. They often pay a regular rental fee on top of this, which is certainly financially beneficial to the seller.
It is also up to the buyer to undertake any planned renovations, which means that the seller can part with their property and make money in return without having to make any improvements themselves.
Furthermore, in many cases, investors who purchase property via a Lease Option go on to let that same property out to its original owners, generating an ongoing income.
Who Might Prefer a Lease OptionThis method of sale may prove beneficial to certain individuals - particularly those in mortgage arrears or who cannot manage the property’s upkeep, as these responsibilities will then fall upon the shoulders of the new owner.
Some contracts allow for any profit made from the eventual sale to be shared with the original seller, which makes them especially attractive.
Who Should Avoid This Option?Lease Options can be complex. You may decide to avoid this type of sale if any of the following issues are of particular concern to you.
Any seller agreeing to a Lease Option must face the risks in pre-agreeing a fixed sale price at a point in the future.
As house prices may rise or fall throughout the period covered by the contract, the seller may find themselves parting with their property for a lower amount than they could have achieved by selling on the open market.
However, conversely, property prices in the area - or indeed, nationally or globally - may have taken something of a hit during this time. In a situation of this kind, a pre-agreed fixed price may prove beneficial to the seller.
Another risk is that, as previously mentioned, the buyer will only be purchasing the “option” to take on ownership of the property. As a result, this is not an assured sale.
If the buyer decides that it is not in their best interest to take full ownership of the property - for example, if house prices fall too far for them to make a profit - they can simply walk away from the arrangement.
For this reason, it is important for sellers to pay close attention to any “break clauses” that are included in the Lease Option contract.
Under some contractual terms, it is also possible for the buyer to sell the option to a third party before the end of the period specified in the contract.
While the original contract will remain in place if this happens, it means that the property will not be taken on by the seller’s originally chosen buyer - which may lead to complications.
What’s more, throughout the option period, the seller’s name remains on the mortgage deed. While the buyer often agrees to take on the associated repayments as part of the arrangement, should they fall behind, the seller will be legally liable for any outstanding amounts.
Finally, as the seller will usually reside in a separate property once the buyer has taken responsibility for the house at the centre of a Lease Option, there will usually be an additional 3% Stamp Duty to pay.
A free and no-obligation cash offer for your house
A “Builder Assisted Sale” is a process whereby the owner of a property enters into a contract with a building firm or developer.
The builder agrees to sell the property quickly on behalf of the seller - and, in return, the seller agrees to purchase a new build that has been developed by the builder.
This is a swift and easy way for a building firm to sell a home on one of their new developments - and it’s possible for them to make a good profit by renovating the property they acquire from the seller before selling it on.
Usually, the builder teams up with an estate agent in order to sell the property swiftly, and for a good price. To aid this along, the builder often arranges all property valuations themselves, and may also pay for the estate agent’s fees
An AS of this kind is often fairly smooth and self contained. There’s no need to worry about where you’ll be moving once you’ve handed over the keys to your property - you’ll already have a new place lined up.br
You’ll often be given a choice of different properties available from the builder. The one you select will usually be reserved for you for around four weeks once the AS process has started.
What’s more, as the builder will often collaborate with an estate agent or other property sales specialist, your house may sell in as few as six weeks - making this an exceptionally speedy option.
As mentioned above, the contract terms associated with Builder Assisted sales are usually fairly inflexible; if you want their help in selling your property, you will be required to purchase a property they have developed.
For this reason, you will usually have very few options when it comes to your next home.
In addition, sales of this kind rarely permit any deferring of Stamp Duty. This amount is often deducted from the Builders’ offer price.
It is also worth noting that you’re likely to get a lower offer from a builder or developer than from some other kinds of investors.
This is partly because they will want to make a significant profit from their eventual sale of the property, but also because they need to ensure that they can cover any unexpected expenses that may arise as they improve and renovate the building.
A free and no-obligation cash offer for your house
If you do not feel that any of the above options will work for you, you won’t necessarily have to fall back on the standard estate agent sales method. Here are some alternatives.
You might decide to put your property up for auction - which may be done either online or in-person via an auction house.
When you opt for this method, you will arrange to list your house with an auctioneer of your choice. You will then need to instruct a solicitor to create a “legal pack” detailing all relevant information relating to the property.
Usually, you will be required to allow viewings of your home in advance of the auction date.
A date will be set for bidding to commence. At a live auction, the property or “lot” will be available for bidding between certain times on a single day. Online, house hunters may be able to bid on the lot for up to 30 days.
If you opt to sell via traditional or “unconditional” auction - either live or online - the winning offer will be considered legally binding upon the close of bidding. Contracts will then be exchanged and an initial deposit paid. This is usually 10% of the price offered by the winning bidder.
The buyer then has 28 days to pay the remainder, plus any additional fees relating to the sale.
Via the “new method of auction” - otherwise known as a “conditional” auction sale, usually undertaken online - bids are made with the intention of purchasing the option to buy.
The winning bidder then pays a deposit to reserve the property on the day bidding closes. They then have 28 days to get all finances and legal matters in order, at the end of which contacts will be exchanged.
Following this, they are granted an additional 28 days to complete. Unlike the traditional method, the buyer is legally permitted to drop out of a transaction of this kind, making it less secure for the seller. However, the reservation fee or deposit is non-refundable.
Homeowners who wish to sell their property fast may also consider the use of a “fast house sale” company, also known as a “cash home buying” firm.
Organisations of this kind will undertake a quick “desktop valuation” of the property in order to make an immediate estimated offer. If the seller wishes to proceed, the buyer will then arrange an independent valuation of the house, then present the seller with a revised figure accordingly.
Once the seller has agreed to this firm offer, the two parties enter into a contract whereby the home buying company purchases the property directly from the seller “for cash”, which means there is no mortgage or chain involved.
The simplicity of this arrangement means that transactions of this kind can be very swift - and often complete in 30 days or fewer - making this an excellent option for sellers prioritising speed.
The funds for this either come directly from the organisation’s account, or from a network of investors. In order to make a profit, the home buying company will offer an amount below the property’s market value. Typically, this falls between 75% and 85%.
Legal, administrative and estate agency fees are usually waived or covered by the company purchasing the property, providing a slick and hassle free process.
A free and no-obligation cash offer for your house
If you think an Assisted Sale would benefit you, your first port of call should be to decide on the specific option that suits you best, then to search for companies and investors that offer this as a service.
Take a look at their reviews on sites like allAgents.co.uk to find out how other users have found their services. Are they easy to deal with? Do they offer transparent advice and information upfront? Do they communicate well throughout the process?
Next, you should explore how they work. Will they buy your property from you directly, or do they need to wait for additional investors to get on board? How long does the process take, on average? What fees are involved? Are there any hidden costs? Might there be any risks?
If you cannot find all of the information you need online, it may be best to contact each specialist directly via email or telephone.
By following this systematic approach, you will be able to create a shortlist of the best and most relevant service providers, then directly compare them to choose the specialist that will best respond to your needs.
If you wish to sell a property that is in a poor state of repair - or one that you cannot continue to run or maintain yourself - an Assisted Sale may be the ideal option for you.
Of course it is vital that you acquaint yourself with the details of each kind, as explained above, in order to decide on the best process. Each has its own benefits and pitfalls, and some may be more suitable for your specific circumstances than others.
In order to learn more and to find out how to achieve a swift and straightforward house sale, all you need to do is to get in touch with us today. We can arrange a free property valuation and provide you with an immediate cash offer.