If you’re having trouble selling your home, are stuck in a property chain or are keen to secure a property purchase, you might be tempted to use Nested, which promises home sellers a percentage of their property value ‘up front’ with the remaining balance paid to you when the property sells.
How does it work?
The company promises to do all the work of a traditional selling agent with a few extra services thrown in, including a progression team and data-driven valuations.
If the property doesn’t sell within 90 days of being listed for a minimum 98% of the valuation, the home owner receives a cash advance of around 95% of the home’s market value.
The advance is a guaranteed payment but doesn’t prevent the company from selling the property at a higher price than the valuation you’ve been given – you get any additional money received as well (less a fee). If the property sells for less, the company takes the loss.
The arrangement covers additional stamp duty liability, should it be payable, and the company has its own mortgage broker who can help buyers secure a mortgage on their next property.
All too good to be true?
Nested was established in 2016 and has raised £120 million of funding comprising £100 million of debt and £20 million of equity funding. The money is being used to promote the company in London, where it has sold over £2 billion of property. It promises customer tools and services that will redefine the way in which homes are sold in the UK and believes the model will suit specific areas, which will likely include Manchester, Bristol and Birmingham.
The system means that property selling is chain-free, with home owners getting cash in advance of selling which means they are effectively cash buyers of their next property.
More than 400 home owners have used the system at a time of market uncertainty which experienced a fall in the number of home sales transactions of 12% over the last year, as well as an estimated 61% of London homes that have been withdrawn from the market before being sold.
The company claims its data-driven valuations make their valuations more accurate and bring transparency to what it describes as an otherwise opaque sales process. Indeed, it claims that it has achieved sale prices within 1.5% than the valuation price. It even hopes to be able to guarantee over 100% of market value in the event of a rising market.
Not all customers have been happy with the service, with some saying that the company had insisted on the use of particular solicitors and a power of attorney over the property.
If you’re selling your property but aren’t confident that the valuation you have received is accurate, ask a RICS Chartered Surveyor to assess your property before entering into an agreement to sell.
Back to August 2019 Newsletter
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