A cash buyer is someone who can buy a property without the need for a mortgage or loan. Selling to a cash buyer has both pros and cons, and the process works a little differently. Let’s take a closer look.
What is a cash buyer?
What does a cash buyer mean?
The term cash buyer refers to those who are able to buy a home outright, exclusively with cash. They’re not involved in a property chain that relies on the sale of their house to buy another. Nor are they relying on a mortgage or loan for the property sale to go through. The money to buy the home is ready and available at the time of making an offer.
Benefits of cash home buyers
There are a number of spinning plates when it comes to selling a house. Being able to buy a property outright undoubtedly has some advantages for the seller. These include:
Avoids house chains
Property chains are notoriously difficult to manage, resulting in a number of delays. If one part of the chain or the sale falls through, the whole chain can collapse.
Selling to a cash buyer will shorten the chain, as they’re not in danger of someone pulling out of their sale and it collapsing. In theory, this can make the sale more secure.
It’s a similar appeal to selling to a first-time buyer who is chain free.
Speeds things along
Generally speaking, a cash sale is a much faster process than the traditional way of buying. This is because funds can be released to the seller more quickly, meaning the deal can go through in a matter of weeks.
This is particularly good news if you need to move quickly, for example for work. Also, the longer the sale runs on for, the more likely it is to fall-through, so it’s a win-win.
Meanwhile, arranging a mortgage can take weeks; usually at least a month from the initial application.
No need to arrange a mortgage
Many house sales don’t go ahead because buyers are unable to secure a mortgage. Even with a mortgage agreement in principle, a mortgage lender can decide not to go ahead. This is why buying a house with cash is often more secure.
They also have more freedom to buy a range of properties, including unique properties – while some lenders will refuse to back such purchases.
When it comes to the property market, cash buyers are often more certain than others, and will often only make a deal when it’s the right time. This is because they’re able to move quicker and get the ball rolling sooner than buyers waiting for a mortgage approval. When they put in an offer – they’re usually sure!
They also don’t have the headache of worrying that their house will be repossessed if they fall into financial difficulty. In general, the process is more certain and secure.
What are the disadvantages of selling a house to a cash buyer?
Of course, there are some inevitable downsides.
Cash buyers are aware some sellers will be drawn to their ‘chain free’ status and therefore put in a lower offer. A speedy, secure sale can sometimes be more appealing than those with more money.
If you’re looking to get the best deal possible, selling to a cash buyer may not be the best option. Make sure you know how much your home is worth before going into it.
Watch out for scams
Unfortunately, some scammers will disguise themselves as property buyers. It’s rare but can still happen. Work closely with a reputable estate agent to ensure this doesn’t happen. Selling your home privately could mean you’re more likely to be a target of a scam.
Also, ensure you have a good solicitor on board. They should take steps to ensure proof of funds and provide legal advice every step of the way.
Issues can still arise
Don’t make the mistake of assuming that selling in this way means ‘problem free’. When buying or selling, delays can occur and sales can fall apart before completion, even after an offer has been accepted.
To avoid this, micromanage the sale at all times. Ensure you know where the stumbling blocks are (if any), keep communication open and get a good understanding of what needs to happen when.
Need a solicitor?
Sound legal advice is essential when selling a house; finding a solicitor is key. We can connect you with the right people to give you the best chance of a successful sale. Get a conveyancing quote for free below.