House buying companies purchase properties directly for cash, offering fast, hassle-free sales. Homeowners typically turn to these companies when facing financial difficulties, divorce, relocation, inheritance issues or potential repossession. But the real question remains: how much below market value do these companies actually offer, and is the convenience worth the financial sacrifice?
What is market value?
Market value refers to the price your property would likely sell for on the open market through an estate agent. The figure isn’t set in stone and fluctuates based on several factors.
Location, location, location
Your property’s location plays a major role in determining its market value. Properties in desirable areas with good schools, low crime rates and convenient amenities generally command higher prices. The condition of your home also matters significantly, as properties requiring extensive repairs typically sell for less than those in move-in condition.
What’s happening in the market
Current property market trends also affect value. During a seller’s market with limited housing stock, prices tend to rise. At the same time, in a buyer’s market with plenty of available properties, prices often fall.
Estate agents typically assess market value by looking at comparable sales, like how similar properties have recently sold in your area. This “comps” approach helps establish a realistic asking price.
Why do house buying companies pay below market value?
House buying companies pay below market value for several reasons. The good ones promise a guaranteed sale with no risk of buyers backing out, which is valuable to many sellers who don’t have time to faff around. Not only that, but they absorb various costs that sellers would normally pay, including legal fees, surveys, and sometimes even moving expenses.
Unlike traditional buyers who might be put off by properties needing work, house buying companies purchase homes in any condition, eliminating your need to make expensive repairs before selling.
There are also higher costs involved. When buying second properties, the purchasing company pays stamp duty at increased rates (an additional 3% above standard rates). They also pay capital gains tax at higher rates when eventually reselling the property at market value.
With a house buying company, you get:
- A guaranteed sale with no risk of buyers pulling out.
- All legal fees and other costs covered.
- The company takes on properties in any condition, eliminating the need for repairs.
- Surveyors to value your property at no cost to you and no obligation from you to sell.
How much below market value do house buying companies offer?
When it comes to the general industry standard, most legitimate house buying companies offer between 75% and 80% of market value for a fast sale. It’s a discounted offer price that allows them to make a profit while covering their costs and risks.
The exact percentage varies based on:
- Your property’s condition and location
- How quickly you want to sell
- Current market conditions
- The company’s business model
Many house buying companies also offer an ‘assisted sale’, an alternative option that could get you 90%+ of market value but takes longer to complete. Assisted sales work through third-party estate agents or auction partners rather than a direct cash purchase.
Beware of fake house buying companies
The quick-sale market has attracted some unscrupulous operators and bad actors. To avoid getting burnt, watch out for:
Middlemen and lead generators
These aren’t actual buyers but intermediaries who collect your details to sell to other companies. They often hook you with unrealistically high initial offers, only to drastically reduce the price later once you’ve invested time in the process.
‘We list your property’ companies
These businesses present themselves as cash buyers but actually try to sell your home on the open market. They don’t have funds to buy your property directly. Instead, they’re attempting to find a buyer for your home while pretending to be cash purchasers themselves. This means the sale is slow and it’s not guaranteed.
To avoid these scams, always:
- Check company reviews and credentials
- Ask direct questions about their buying process
- Confirm they have immediate funds available
- Get everything in writing
- Be suspicious of offers that seem too good to be true
At Property Rescue, we typically offer around 80% of market value for houses – which are some of the best rates in the market. We also offer assisted sales where you’ll get 90%+.
What affects the offer from house buying companies?
It’s understandable that you want to achieve the highest price possible, even when selling to a house buying company. There are several factors that influence how much a house buying company will offer you.
Condition of the property
Homes requiring major repairs typically receive lower offers. For example we offer a bit less when there are critical structural issues that would involve major reconstruction, or problems such as Japanese knotweed. We’re happy to buy these properties but we’ll need to resolve the problems after we buy them, so our offer reflects this.
Location
Properties in high-demand areas can secure offers up to 85% of market value. Location remains a prime factor even in quick sales.
Speed of sale required
If you need an extremely quick sale, you might receive slightly lower offers. When we as buyers need to forgo structural audits to meet the tight deadline, we take on additional risk, which is reflected in the price since we are buying blind.
Current market conditions
The broader property market affects offers too. During a housing boom, you will always get better offers. When the market value is up, since our offer pivots on the market value, it means you’ll get a higher offer.
Example cost breakdown: Traditional sale vs house buying company
Let’s look at how the numbers compare for a property valued at £200,000:
| Sale method | Offer price | Fees (agent, legal, EPC) | Net amount received | Time to sell |
| Estate Agent | £200,000 | ~£5,000-£8,000 | £192,000 | Around 6 months |
| House Buying Company (85%) | £170,000 | £0 | £170,000 | As little as 7 days |
As you can see, the difference in money received (£22,000 in this example) is the price you pay for speed and certainty. Fast house buying companies are the perfect solution where an urgent sale is needed, such as facing repossession by a mortgage lender, or dealing with some other immediate financial burden.
Pros and cons of selling to a house buying company
There are plenty of benefits when it comes to selling a property to a reputable house buying company, especially when speed is your most pressing concern. Even so, it’s good to look at the entire picture to make a well-informed decision.
Pros
- Guaranteed sale. There’s no risk of a buyer pulling out
- Fast process. Contracts can be exchanged in as little as 48 hours
- No fees or hidden costs. Legal fees and surveys are covered
- Sell in any condition. There’s no need for repairs or refurbishments
- Discreet sale. No ‘For Sale’ board or viewings required
Cons
- Lower offer than market value. Typically 15% to 25% below full market price
- Variable quality. Not all companies offer the same level of service
- Potential for last-minute price reductions with less reputable firms
- Limited negotiating power once you’re committed to the process
How to choose a reputable house buying company
If you’re selling your house fast via a house buying company, you want to make sure you choose the right one. From checking their accreditations to reading reviews to see the experiences other customers have had, here’s what to look out for.
Check accreditations
Look for membership in recognised bodies such as the National Association of Property Buyers (NAPB), The Property Ombudsman (TPO), and ideally the Financial Conduct Authority (FCA).
Read reviews
Trustpilot and Google Reviews provide valuable insight into other customers’ experiences. Look for companies with consistently positive feedback.
Beware of ‘too good to be true’ offers
Some companies will give a high initial valuation to win your business, then reduce the price later. A genuine cash buyer will offer a fair, realistic price from the start.
Ask about their process
Transparent companies will clearly explain every step of their buying process, with no hidden surprises and clear contracts that show you what you’ll get in no uncertain terms.
Confirm they have immediate funds
Ask for proof they can complete quickly. Legitimate house buying companies will have funds readily available.
Hint: Property Rescue is one of the UK’s longest established house buying companies. We’re members of NAPB, TPO and FCA, with a 4.8 star rating on Trustpilot. We offer a clear, no obligation process. The offer we make is exactly what you will receive, if you accept it. We’ve built our reputation on honest, simple and clear business practices because we want you to be happy.
When is a house buying company the best choice?
House buying companies provide a valuable service in specific situations where speed and sale certainty matter more than achieving maximum price. Here are the circumstances where using such services makes the most sense:
- Facing repossession and need a fast sale
- Divorce or separation requiring a quick property settlement
- Inherited property and want a hassle-free sale and need cash to pay inheritance tax
- Financial difficulties where waiting for a traditional buyer isn’t feasible
- Property is in poor condition and unlikely to sell on the open market
- Chain breakdowns where you need to secure your next home
- Relocation for work or other reasons requiring a quick move
For a transparent, fair, and guaranteed cash offer, contact Property Rescue today for a free, no-obligation cash offer.