How Much Below Market Value Do House Buying Companies Offer

House buying companies typically offer between 70 and 85 percent of a property's full market value. This means if your home is worth £200,000 on the open market, you might receive between £140,000 and £170,000 from a professional home buying company. The exact percentage depends on several factors including the location, condition, type of property, and how urgently the company believes it can resell the home.

Why the Offer Is Lower Than Market Value

The lower offer reflects the convenience, speed and certainty these companies provide. Unlike traditional sales that can take months and fall through at the last minute, a house buying company will usually complete within seven to twenty-eight days. They also cover legal costs, avoid estate agent fees and take on the risk of resale. These benefits come at a price, and that price is a discounted purchase.

Companies build in a margin to protect themselves against future market fluctuations, unexpected repairs or delays in reselling the home. In many cases, they aim to resell the property through auction, to landlords or on the open market, sometimes after carrying out improvements. The discount allows them to make a profit while also absorbing these uncertainties.

How Offers Are Calculated

To calculate an offer, a company will usually carry out a valuation using internal surveyors, online data and comparisons with similar sold properties in the area. Some may also commission independent RICS valuations. The final figure will be adjusted to reflect the condition of the home, how quickly the seller wants to move, and any legal or structural complications such as short leases, subsidence, or incomplete paperwork.

Sellers with homes that need work, are in undesirable areas or have complex legal issues may receive a lower percentage than those with more marketable properties. Some companies operate with fixed margins while others will vary their offer based on the projected resale value and effort involved in completing the transaction.

Comparing the Costs of a Quick Sale

Although the offer is below market value, it is important to compare it against the true net proceeds from a standard sale. Traditional sales involve estate agency fees, conveyancing costs, mortgage repayments during the sales period, repairs or decoration to attract buyers, and possible price reductions if chains break or surveys reveal issues. For sellers needing speed or certainty, the guaranteed sale and reduced hassle can outweigh the financial discount.

For example, if a typical sale results in 95 percent of asking price after fees and delays, and a buying company offers 80 percent but completes within two weeks, the seller may decide the trade-off is worthwhile, especially in cases of divorce, bereavement, repossession risk or relocation.

What to Watch Out For

Not all house buying companies operate with the same transparency or standards. Some may make an initial high offer, only to reduce it just before exchange. Others may add hidden fees or delay payments. It is crucial to choose a company that is a member of The Property Ombudsman, has good independent reviews and provides a clear contract. Reputable firms will offer a no-obligation quote, cover legal fees and not pressure the homeowner into accepting.

Getting multiple quotes, checking the terms of any agreement, and consulting an independent solicitor can help protect sellers from poor practice. If in doubt, taking a few extra days to consider the offer or seek advice is always a wise step.

Conclusion

House buying companies usually offer between 70 and 85 percent of a property's market value in exchange for a fast, hassle-free and guaranteed sale. While the discount may seem steep, the speed and simplicity can make it a worthwhile option for sellers facing urgent circumstances. As with any financial transaction, it is important to research the company, understand the terms and compare offers before proceeding.