Advantages of selling to a cash house buyer
So with cash house buyers generally looking to buy at a discount why would you sell to one? You would usually be looking to get the best price for your house when it is time to sell but cash house buyers can come with certain advantages over mortgage buyers.
Since a cash buyer doesn’t need to get approval for a mortgage to buy your home, this can lead to significant savings when it comes to time.
Mortgage lenders add an extra layer of complexity to the sale of a house, they need to carry out affordability checks on the buyer, they need to be sure that the property is in sound condition otherwise they won’t lend against it. All of these things can slow the process down and as lenders are constantly updating their products even if your buyer has secured a mortgage in principle it could be removed at any point up until purchase, if this happens the buyer would need to reapply which adds more time.
Another factor that can contribute to a faster experience when selling to a cash buyer is that they tend to be more experienced house buyers which means that it is usually not their first rodeo, they know how the process works and they will likely have a competent solicitor that they have worked with before, all of this can add up to weeks saved during conveyancing.
Selling to a cash house buyer becomes significantly more appealing (and potentially necessary) if your property has some defect that would affect the appeal or even mortgageability of the property.
Issues ranging from an invasive plant infestation, such as japanese knotweed, to structural issues, such as subsidence, would mean that lenders will be unwilling to secure a loan against the property putting the kibosh on mortgage buyers. In this instance if you don’t have the available cash to make the necessary repairs pre sale then a cash buyer is the only option when it comes to securing a sale. In fact people looking to buy houses in cash often relish the opportunity to buy such a property as they can bag a great deal and add value quickly.
Another factor is the aesthetic condition of the property. Most mortgage buyers are looking to buy a house that needs little to no work done to it apart from a lick of paint here and there and maybe some new carpet. If your property is in need of complete modernisation this will reduce the pool of mortgage buyers as few are willing to take on such a project as most will want somewhere that they can move into straight away. In most cases a cash house buyer won’t be buying the property to live in themselves and are more prepared to take on a project, again any opportunity for them to get a good purchase price and add value is the ideal situation for a cash buyer.
Why would you need to sell to a cash house buyer?
So now that we know the advantages of selling your house to a cash buyer it is straightforward to understand why you would need to sell to a cash house buyer. If you have circumstances where you need a quick sale, such as relocating for work or moving in with your partner and don’t want to be wasting your hard earned cash paying bills for an empty property, then a cash buyer could be a good option.
It is worth bearing in mind however that not all cash buyers offer security when it comes to speed, yes they don’t need to be approved for a mortgage but that doesn’t mean that they won’t drag their heels or be slow to respond to questions during conveyancing just like any other buyer.
You can circumvent this a bit by setting a target for your completion date but this is still no guarantee that it will actually happen to your time scale. If you do need a very quick sale then there is a type of cash buyer who can deliver this speed with more surety, these buyers are known as cash house buying companies, also called “quick sale companies” and they have the ability to buy you house in weeks, more about these later.
Another reason to need to sell to a cash house buyer is the condition of the property, if you have any defect that makes the property unmortgageable then in order to sell you need a cash buyer. You can find some common issues that make properties unmortgageable here;
- Structural issues
- Japanese knotweed
- Spray foam loft insulation
- Short lease
- Title issues
Finding a cash house buyer for your house
If you have a good reason to sell to a cash buyer you are probably wondering how you can actually find one, it’s not like they are just walking around the streets with a “cash buyer” badge pinned to their lapel. Well there are a couple of different ways in which you can find a cash buyer for your house.
You can sell your house at auction
Anyone looking to buy a property at auction is essentially a cash buyer, due to the way that the property auction process works it’s not possible to use a traditional mortgage to buy a property at auction. The obvious drawback with selling your home via auction is that there is no guarantee on the price that you will achieve, it depends on how much the bidders on the day are willing to pay. Which could be as low as 70% of the market value of your home.
Use a cash house buying company
If you are looking for more certainty than gambling at a property auction can provide then you could approach a cash house buying company, also known as “quick sale” or “we buy any house” companies. These companies will provide you with a no obligations cash offer for your house.
They will usually give you a rough idea of the amount you will receive on an initial phone call and if that could work for you they can provide a no obligations cash offer within 24-48 hours. The main advantages of this approach are certainty, that you have a buyer, and speed, these companies can buy a house in a few weeks if necessary. You do have to do your due diligence when it comes to finding the right company as there are some rogue operators out there who are just looking to take you for a ride. There will be more on what to look out for later.