The trading watchdog launched an investigation into the sector in April this year amid concerns vulnerable homeowners in the UK were being pressured into selling their property too cheaply.
Three "quick sale" companies that promise to sell properties for struggling homeowners are to be formally investigated by a regulator.
People who sell their homes to a quick house sale firm usually receive between 10% and 25% less than the market value of their property in return for getting fast access to cash.
The service may be used by those wishing to pay off debts, people facing declining health, or those relocating overseas or moving for a new job. It remains niche, representing only 0.5% of UK residential property sales. Total sales are estimated at between £500m and £900m.
But concerns have been raised about firms reducing the price offered at the last minute when the seller has already committed to the transaction.
The watchdog stopped short of recommending statutory regulation for the sector, instead opening discussions with quick house sale firms on developing self-regulation and publishing guidelines for consumers.
OFT director, Gaucho Rasmussen, said:
"Responsible quick house sale firms offer a valuable service to consumers who want a fast sale. However we have also seen potentially illegal behaviour and as a result the OFT has opened investigations into three companies.
When sellers get a bad deal, they could lose a lot of money. We want to ensure that consumers can have confidence in this sector and put an end to these shoddy practices."
The BBC has reported that during an investigation last year, they spoke to two people who were angry at the way they had been treated by quick sale companies.
Malcolm Haywood, from Lincolnshire, wanted to sell his house quickly and agreed to a sale price of £120,000. But just before the deal was signed, the company involved, Gateway Homes UK, dropped the price to £80,000.
Pat Hardy, from Teesside, signed a similar deal with Tom Craven Property. She had agreed a purchase price of £75,000, but the day before the removal men were due to arrive, they lowered the offer to £40,000.
Both companies insisted that the number of complaints amounted to less than 1% of their customers.
Peter Bolton King, global residential director of the Royal Institution of Chartered Surveyors (Rics), said the body has long been concerned about some quick house sale companies.
He said:
“Clearly, there will always be a premium to pay for those who need to move rapidly but there is no justification whatsoever for unethical or underhand practices.”
The consumer group Which? called on the OFT to take firm action and to name the three firms it is investigating.
It added:
"Anyone thinking about this as an option should shop around and check if their provider is signed up to a code of practice or redress scheme, or is regulated by an official body."
Gillian Guy, Chief Executive of national charity Citizens Advice, said:
"We see people who have been left high and dry when rogue quick house purchase companies go back on their promises. Homeowners come to us for help with unfair terms and conditions, after a speedy sale turns out to take longer than promised or because offers are lowered at the last minute, leaving them with no option but to let their home go for less.
It's good news that the OFT are looking into quick sales companies. Often people want a fast house sale because they have to move at short notice for work or need to pay off debts. Rogue operators must be tackled so that people can be confident they are dealing with a trustworthy, responsible company. If you're having difficulty with a quick house sale firm, then Citizens Advice can help - contact our Consumer Advice Service or your local bureau for free, impartial advice."
