If you’re given a choice, would you rather wait days for the conveyancing and mortgage process to work or use a cash house buyer who can close far faster on your sale? Most UK residents would agree, they want a home buyer who pays cash, and it happens for many reasons. What is a cash house buyer and why would you even want to work with one in the first place? This quick guide can help you learn more about how it works and how to find a home buyer who is willing to pay cash.
Cash Home Buyers 101
A cash buyer can be a person or an agency (usually created by several real estate investors) who have funds available to buy a property without resorting to financial assistance from a lender. There are really two categories of cash buyers. The first is a buyer who already has cash from a business-related venture or owns a home with significant equity. That means they don’t need to rely on something like a mortgage to purchase this property. The second is real estate investors or cash buying agencies purchase homes and renovate them for sale, rent or flip homes to make a profit.
There are actually a number of benefits to working with this kind of buyer.
- The cash buying process is a short process with closing occurring usually within 10-14 days, compared to several months with the traditional method of selling a home.
- For the seller, there is almost no stress as there are no home showings, no estate agents involved and your home doesn’t even have to be staged.
- Cash home buyers usually buy the property as is; this saves the seller an enormous amount of time and money because they don’t have to make pricey renovations.
- Overall a cash buyout is usually associated with fewer fees. If, for example, a cash buyer comes into the picture before home is listed, an estate agent doesn’t have to be involved. Typically you can save on conveyancing fees and inspection fees as well.
As with most things, though, there are some downsides to the process too. It’s possible the sales price won’t be quite as high as it would were buyers to get into a bidding war over the property. Additionally, most cash buyers will offer a contract with contingency clauses that permit them to back out of the transaction if the home survey uncovers problems like structural defects.
Despite those potential problems, though, there is real speed in working with a cash buyer. They don’t need financial assistance, so the day of completion comes far faster – sometimes in just a few days after the exchange of contracts. When working with a buyer who requires a mortgage, just the application process can take several weeks.
Once the home buyer finalises the contract in a cash sale, the funds are electronically transferred to the seller’s bank account, or in some cases, the payment is made with a banker’s draft.
Do Cash Sales Happen Often?
The median home price in the UK is currently £278,000, making a cash sale downright unattainable to many. Given the fact that home prices are only increasing, it’s tough to say whether you’ll be able to find a cash buyer on your own. That said, though, there are many investment companies looking to grab properties for cash, and in some situations, working with an investment company can be a huge win for a seller. While you might not get your asking price, what you are likely to get is the speed and the as-is sale a cash buyer can offer you, something that is essential if you’re going through the legal process of repossession, if you’ve inherited a property you just don’t want, or if you need to move for your job fast.
Making the Sale No Matter What
If you’re looking for the perfect house buyer, choosing one offering a cash sale might be right for you, but it’s not right in every situation. Do your homework to learn more about cash buyers, which ones might be right for you, and which ones you should avoid before you make a final decision.