House Buying Companies: How Much Do They Really Pay for Your Home?

Selling to a reputable cash house-buying company can be a great option if you want to achieve a fast, certain sale in a short timeframe.

However, to get a quick sale, you will have to make a pretty major compromise on the sale price.

So, how much do house buying companies really pay?

Genuine, well-funded house buying companies usually offer in the region of 78-83% of your property’s market value. This is significantly less than you’d get selling with an estate agent, but you’ll make cost savings which should be factored in. Some home sellers feel the compromise is worthwhile for the quick, certain sale.

I have been in and around the “we buy any house” industry for nearly 10 years. In this time, I’ve helped many homeowners who have fallen victim to unethical pricing tactics.

In this article, I’ll show you how to avoid the scammers and find a reputable, trustworthy house-buying company.

We look in detail at how much genuine, well-funded house-buying companies pay and why they cannot offer more (even if they claim they can). We also reveal the pricing scams to watch out for and explain why you should be wary when shopping around for offers.

1. What are house-buying companies?

House buying companies buy homes directly from sellers. They pay less than market value but offer a much faster and more certain way to sell your house compared with estate agents or property auctions. They’re also willing to buy any property, even if it has issues.

You may have also heard them referred to as “cash house buyers”, “property buying companies” or “we buy any house companies”.

Selling your home directly to a reputable, well-funded cash house-buying company is the fastest way to sell your house.  

Genuine cash house buyers are a great option if you want to sell your house quickly. They can make you a formal offer within 24-48 hours and buy your home in as little as 2-3 weeks.

However, because they pay a reduced price for your home, they aren’t right for everyone.

So, how much do “we buy any house” companies pay for your property?

Related: Cash House Buyers: The 11 Pros & Cons (My Honest Advice Before You Sell)

2. How much do genuine house buying companies offer?

Genuine, well-funded house buying companies usually offer in the region of 78-83% of your property’s market value.

Top tip: In my experience, house-buying companies don’t work on a percentage basis for properties worth less than £100,000. Instead, they’ll usually take circa £15,000 - £20,000 off the total value.

If you prioritise your time, or you don’t want to miss out on your dream home after your house chain has collapsed, selling to a cash house buyer can be a great option.

But you need to be prepared to take a significant hit on the price for the speed and certainty this service offers.

You should be wary of companies offering you over 85% of your property’s market value. They are almost certainly making false promises to win your business and it’s highly likely they’ll drop their offer at the last minute.

If an offer sounds too good to be true, trust your gut and walk away!

Related: House Buying Companies: The Ultimate Guide [My Honest Advice & Tips]

3. When might a cash house buying company be able to offer over 80%?

In some instances, companies that buy your house may be able to offer you slightly more than 80% of the market value.

In the following circumstances, the company will receive a “stamp duty exemption” (saving 3-5% in costs), which they can pass on to you in the form of a higher offer:

1. If they’re repairing a chain;
2. If you're buying a new build;
3. If they’re buying from the personal representatives as part of the sale of an inherited property; or
4. If you’re relocating for work.

However, if a house-buying company claims they can buy your property for 90-100% of its market value, they are simply not telling the truth.

But why can’t a “we buy any house” company offer you more for your property…?

4. Why can’t cash house buying companies offer me more for my house?

Cash house buyers make their profit by buying your home below market value. They then step into your shoes as the new owner and try to sell it for the full market value.

House-buying companies incur a lot of costs in the process, such as financing costs, stamp duty, legal, estate agent and holding fees. They also have company costs to cover, such as staff salaries, office rent, marketing costs, tax and more.

So, they must buy at around 78-83% of market value to cover their costs and make a profit.

This is why you won’t find a genuine company who’s able to offer more than that. Especially in the current market where house prices are generally falling.

Unfortunately, a big part of the answer to how to sell a house quickly is that you need to compromise on the price.

5. How do house-buying companies value my property and produce their formal offer?

Reputable house-buying companies use comparable-backed valuations to find out the current market value of your property. They will then make you a formal cash offer based on the valuation. A realistic cash offer will be in the region of 78-83% of the property’s market value.

Genuine cash house buyers should provide a price guarantee with their offer, which protects you from possible future price drops.

There are two ways house-buying companies can value your property:

1. Estate agent valuation. Two local estate agents will visit the property and produce written reports for the house-buying company. The company will combine the estate agent valuations with their own online research to come up with their formal offer.
2. Online valuation. This valuation is done using the myriad of data and tools that are available online. The company will look for comparable properties in a similar condition, style, and location to yours that have sold recently. They may also request up to date photos, a floorplan, and sometimes a video walkthrough to assist with the valuation.

Once you’ve received your formal offer, ask yourself two things:

1. Is the valuation realistic and backed by evidence?
2. Is there enough margin in their offer for the company to make a profit?

If the answer is no to either (or both) of these questions, the formal offer is probably too good to be true and you should treat it with suspicion.

Top tip: A good way to filter out unethical companies is to ask them to share the information they have used to formulate their valuation and make their offer. If they’re not willing or able to share this information, it is a red flag, and you should walk away.

Our recommended cash house-buying company uses the second online valuation method. This means they’re able to produce a formal cash offer within two working days, without needing to send anyone round to your property!

Our trusted house-buying company also gives you a price promise guarantee with their offer. It basically sets out that they’ll have to pay you compensation if they reduce their offer later in the process.

The reason they give you this guarantee is so you know they won't drop their offer.

Unfortunately, the last-minute price drop is a common tactic used by so many unethical house-buying companies. Read on to find out how you can avoid falling victim to this common “we buy any house” scam…

Related: Exposing The Top 5 “We Buy Any House” Scams (And How To Avoid Them)

6. Watch out for unethical pricing tactics!

Unfortunately, because the industry is unregulated, there are many “we buy any house” scams to look out for.

One of the most common tactics used by unethical house-buying companies is reducing their offer at the last minute.

The price you accept at the start of the process actually means nothing. This is because it can be changed at any time and for any reason (until exchange of contracts).

Many dodgy cash house buyers employ this tactic and will drop their offer by thousands at the last minute.

Take a look at this review of one of the biggest house-buying companies…

This leaves sellers with an ultimatum: reject the price drop and go back to square one or move forward with the lower price.

You may think you wouldn't accept the lower offer if that happened to you but sadly, it's easier said than done.

That's because these companies are experts at putting you in a position where you simply don't have a choice. This is why so many people do end up having to accept the lower price, and why companies use this tactic in the first place.

The good news is there are things you can do to avoid falling victim to this common scam…

6.1 How to avoid the price drop scam

There are a few of things you can do to help avoid this common price drop scam:

1. Make sure the offer is guarantee-backed. The house-buying company I recommend will give you a guarantee when they make their formal offer, so you know they won’t drop the price at the last minute. If a company isn’t willing to offer a guarantee, it might be worth questioning how genuine their offer really is.
2. Demand the survey is done at the start of the process. If the company is delaying the survey, it’s probably because they want to drop the price at the last possible minute and use the survey results as an excuse. Make sure the company books the survey within a couple of days of you accepting their offer to minimise this risk.
3. Demand exchange of contracts asap. “Exchange of contracts” is the point where the sale becomes legally binding, meaning the price cannot change beyond this point. Don’t let the buyer stretch it out until the last minute so they can drop the price when you’re at your most vulnerable.
4. Get a recommendation. The most failsafe way of avoiding these dodgy pricing tactics is to get a recommendation from someone you can trust. I’ve worked in and around the house-buying industry since 2014, and there’s one company I know are trustworthy and upfront with their offers...

If you want to shop around, instead of getting our recommendation, there are a few things you should be wary of…

7. Shopping around for offers from “we buy any home” companies can be risky…

When most people decide to look into selling to a cash house-buying company, they'll contact two or three companies to get offers.

Unfortunately, shopping around for offers from multiple house-buying companies can be a risky strategy.

Naturally, you will want to go with the company offering you the best price for your property. “We buy any house” companies know this, and so many will give you fictional, high initial offers to outbid the other companies.

This is a pricing tactic used by unethical companies to win your business.

The company never intends on paying this inflated offer for the property and will drop it at the last minute when you are backed into a corner.  

The more you shop around, the more likely you are to end up with the worst company (as this tends to be the one who’s prepared to lie the most about the price they can offer you).

Top tip: Unfortunately, you cannot trust online reviews for house-buying companies either. Many of the companies post fake reviews, campaign for bad reviews to be removed or even pay customers themselves to take them down.

You can learn more in my article "Can You Trust House-Buying Company Reviews? [How To Avoid The Scams]".

In an unregulated industry with companies claiming to offer up to 100% of the market value, it can be difficult to pick out the genuine cash offers and find a company who really deliver on their promises.

I’m here to help you navigate this…

7.1 Contact my recommended Cash House Buyer

I’ve worked in and around the “Cash House Buyer” industry for nearly a decade and know nearly all the main players.

If you’re thinking about a fast sale, the first thing you need to do is find out whether this really is the right option for you…

8. Will I have to pay fees?

If you sell to a reputable cash house-buying company, you do not have to pay any fees, hidden costs, or other deductions of any type. You should avoid any house buying company that asks for an upfront payment of any kind, or charges for a valuation. You should also steer clear of any companies charging withdrawal or cancellation fees.

Be careful of house-buying companies that mention any of the following:

• Valuation charges. Some house-buying companies charge anywhere from £200-£500 for a formal valuation. This is a cheap tactic to make an easy couple of hundred pounds from you. They entice you in with a high verbal offer, only to lower it as soon as you’ve paid for the formal valuation. The company never intended to buy your property for the original amount and have pocketed a few hundred pounds without doing any work.
• Withdrawal/cancellation fees. Even if the company claims these will be waived in certain circumstances, you should be able to walk away at any point free of charge.

8.1 Legal fees

Another fee to consider is your legal fees. Most house-buying companies will cover your legal fees, but there’s usually a cap on the amount.

A lot of house-buying companies will cover your full legal fees if you use their recommended solicitor.

If you decide to use your own solicitor for the transaction, you may have to pay the difference between the house-buying company’s fee cap and the solicitor’s fee. This will come out of the sale proceeds.  

The reputable house buying company I know and trust do not charge any fees and will even pay your legal costs.

8.2 Don’t just focus on the fees, think about the bigger picture

Although most house-buying companies will not charge you any fees to use their service, it is still the most expensive way to sell your house.

When weighing up whether a house-buying company is the right option for you, you shouldn’t just focus on the fees involved. Let’s take a look at an example…

This is the price you pay for a guaranteed, speedy, and hassle-free sale.

Although you’ll have to pay lots of fees if you sell with an estate agent, you’ll still end up with more money overall.

So instead, think about the overall picture, your priorities and what you want out of your home sale.

But how do you know if selling to a cash house-buying company is the right option for you…?

Related: Is It Worth Selling Your House to a House-Buying Company? [Pros & Cons]

9. Is selling to a cash house-buying company right for me?

Whenever I speak with people who are considering selling to a house-buying company, I really encourage them to take a step back and take some time to think. It’s definitely not the right option for everyone.

In today’s property market, most people simply cannot afford to take a 17-22% discount on their sale price.

But if you’re in the fortunate position where you can afford to accept a reduced offer, then using a house buying company will be the fastest, easiest, and most certain sale you’ll ever have.