Selling your House For Cash – The Ultimate Guide

A house is one of the most valuable assets that most of us will ever own and the majority of residential house purchases in the UK are bought with a mortgage.

There are some buyers out there though that don’t require a mortgage and instead opt to purchase property in cash, the elusive “cash house buyer”.

In this article we will explain everything you need to know if you are considering selling your house for cash including the best options if you want to sell your house for cash fast.

What is a cash house buyer?

There is no strict definition of the term “cash house buyer” but in essence it is a broad term for any individual or company that purchases properties without the use of a mortgage a so called “cash sale”. Cash buyers for houses come in many shapes and forms; from cash rich individuals looking to buy a house to live in debt free, investors building a buy-to-let portfolio all the way through to large companies and investment funds. In almost all circumstances there is one common goal which is the reason that they use “cash” to purchase the properties, that goal is to buy them at a discount to full market value.

The greater the discount a cash buyer can achieve the better the purchase is as an investment. If you can buy a property at say 90% of its value then you instantly have 10% extra value that you can unlock in various ways, either by refinancing the property or selling it on for a higher price. Buying at a discount also makes for higher rental yields and greater returns as the property value increases over time.

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.

Speed

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.

Condition

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
Mineshafts
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.

Cash Offer Calculator

Another option is to go through the same process that you would to find any buyer, via an estate agent on the open market. Cash buyers are still looking for properties in the same way that everyone else is, they are looking at property listings with estate agents and scouring through property portals. If you want to advertise the fact that you are only interested in finding a cash buyer for your property then you can ask to estate agent to add “cash buyer only” to the listing.

What is meant by “cash buyer only”

If you see “cash buyer only” on a house listing this means that the property is either not suitable for mortgage buyers or the seller has stipulated that they only want cash offers. In the majority of cases this will be down to an issue with the property that would make securing a mortgage on it difficult or impossible, such as a short amount of time left on the lease or a defect with the property.

Receiving a cash offer on your house

If you are selling your house through a traditional estate agent then receiving a cash offer is the same as getting any other offer. If you are not advertising the property as “cash buyer only” and receive a cash offer it is worth weighing up the pros and cons before accepting or rejecting the offer. In most cases a cash offer will be below the asking price but how much lower and what your individual circumstances will dictate whether it is a good offer for you or not.

Selling your house for cash

If you decide “i’m going to sell my house for cash” and accept the cash offer the sales process is more or less the same as any other house sale apart from the fact that there will be no mortgage lender involved which can make conveyancing a little bit faster.

Selling a house to a cash buyer is really no different from your perspective as selling to a mortgage buyer, once the completion occurs the money will get transferred into you account in the same way, no you don’t get a truck full of cash showing up at your door that you can roll around in, which while being less fun is significantly easier when it comes to counting it.

Selling your house fast for cash

As previously mentioned one of the reasons for selling a property for cash is speed but remember that is not necessarily the case that a cash buyer will be much faster than a mortgage buyer unless they are purchasing through an auction.

There are separate rules for auction sales that means they will complete faster than an open market sale. Without running the risk at auction by far the best way of ensuring a quick sale is to use a specialist “quick sale” service that is offered by many of the cash house buying companies out there.

Although many of them claim that they can buy your house in seven days, and this is actually possible in certain circumstances, this is not the norm and typically a realistic timescale would be 3 – 4 weeks for a quick turnaround.

Selling your house ‘as is’ for cash

When people talk about selling a property ‘as is’ they mean in its current condition without any changes made to it, cosmetic or otherwise. Typically when selling a house on the open market a mortgage buyer will want to buy a house that meets a certain standard, for example if a property had a damp patch with the wall paper peeling off and a stained carpet it is unlikely to get many viewings.

A cash buyer on the other hand is more likely to ignore such issues and might even be looking for properties that are a little rough around the edges. It is still important to mention any major issues or defects with the house that you are selling so the buyer knows what they are dealing with upfront, trying to hide major defects such as subsidence will only delay the process as it will almost certainly be uncovered at some point in the process, cash buyers are still likely to get a survey on the property which will uncover any major issues, so you are only going to slow your sale down, leave yourself open for a reduction in the buyers offer not to mention open to a potential legal dispute as you are required by law to state any known issues with the property during the conveyancing process.

Companies that buy houses for cash

When looking for a genuine cash buyer for your home there is another option. There are companies out there who offer house buying services. These companies will buy your property from you directly and function as any other cash buyer but they are professional companies in theory offering you a much faster and more reliable service than an individual cash buyer.

When it comes to speed a house buying company really is the best option. They have the set up to deliver a fast service since speed is one of their unique selling points. Many companies will be able to buy your house in a few weeks if needed. They have sales progression specialists and solicitors that are used to turning a house sale around fast.

Downside of using a house buying service

Price – the major drawback with a house buying service is that cash buying companies will only pay around 80% of the full market value of your property. However some of this discount is offset by the speed at which you are selling your property as you won’t have to pay the expenses of owning the property for as long as you would if you were selling on the open market, which could take up to 9 months or more. Securing a quick house sale can lead to significant savings.

Upsides of using a house buying service

Guaranteed sale – A big advantage of using a house buying service is the peace of mind that an agreed sale can offer, a house buying company will rarely back out of a purchase unless any major, previously undisclosed, issues come to light during the conveyancing process.

If something does come up it is still unlikely to derail the sale completely, most cash house buying companies promise to buy any property and will purchase properties even with major defects although the price that they offer will be reduced to reflect this work that needs to be done to fix the issue.

No costs to pay – Another plus is that you have no costs to pay, the best house buying companies don’t charge fees, and since you don’t need to use an estate agent there really is nothing to pay. They will usually pay your legal fees as well. This wouldn’t be the case if you were selling to an individual buyer.

Speed of sale – as mentioned earlier a professional cash house buying company can buy a house in 2-3 weeks if needed, this can be great news if you need cash in the bank fast.

Lack of regulation

An issue with the “quick sale” or “we buy any house” industry and that is that to date it is not a regulated industry. There is a self governing body called the “national association of property buyers (or NAPB)” which looks to hold companies to certain standards but membership is voluntary so it isn’t able to stop the rogue operators who are just looking to make a quick buck by ripping people off.

This has lead to some skepticism around the industry, and rightly so, but in essence the service that the legitimate companies provide is extremely valuable to people in the right circumstances, the trick is picking the right company to use.

Who are the best cash house buyers

The cash house buying industry does have a bit of a bad reputation. You hear the horror stories where sellers have thought they have sold their property at one price only for the buyer to come back at the last minute with a much lower offer that they are either forced to take or start the whole process again.

This situation can be avoided though if you choose the right company and are open and honest about your property with them upfront. When it comes to choosing the right company you really need to do your due diligence and answering these questions is a good place to start;

Are they a genuine house buying company? – some companies will claim that they are buying your house only to be actually brokering a deal with a third party in the background.
Is their offer realistic? – Some companies will manipulate their offer depending on what they are trying to achieve, if they want you to use one of their other services such as selling your property to an “investor” they might make a low offer to purchase your house, around 70% which they know you are unlikely to take but then offer you an alternative solution which could get you more. The opposite is also true, be wary of companies that make an offer to buy your property much above 80% of its value. Some companies will offer as high as 90% which is designed to get you to agree, they then sign you into a one sided contract with an inevitable offer drop towards the end of the sale.
Do you have to sign a contract or tie in? – there is absolutely no reason that you need to sign a contract with a buyer for your property, you wouldn’t if you were selling it to a private buyer, why should a company be any different? If a company is asking you to sign a contract it is because it is in their best interest and not yours. These contracts will tie you in to that particular company often leaving you with costs if you want to pull out of the sale, unless they lower their offer that is which they inevitably will if they are asking you to sign a contract. Always seek legal advice before signing any contract if you are unsure.
Can you use your own solicitor? – The solicitor for your house sale should be acting on your behalf and in your best interests so you should be free to choose whomever you wish. Many companies will offer a panel of solicitors you can choose from for simplicity but if they insist that you use one of them and can’t choose your own if you want to then you have to question why.
Are there any fees to pay? – the best house buying companies will not charge anything for their service (they are making their money from the discount they are getting on the property) and most will also pay your legal fees up to a reasonable amount. Avoid companies that are asking for you to pay any costs upfront.
Are they a member of the NAPB? – If a company is a member of the NAPB it means that they are signed up to the Property Ombudsman redress scheme which means that if things do go wrong and you are unhappy with the service you received you have a course of action available to you.

Following these questions will help weed out the most unscrupulous of companies but there are also other things to consider, such as customer service for example.

Here at the cash house buyer guru we have mystery shopped many of the biggest house buying companies which enables us to provide our informed opinion on which companies you should consider and which companies you should probably avoid like the plague. You can find our full list of the best cash house buyers here.

Cash Offer Calculator

Frequently Asked Questions

How long does it take to get the cash when you sell to a cash house buyer?

As with any house sale this will depend on the completion date of the sale. Once the conveyancing process has competed and the contracts have been signed your solicitor will transfer the funds on the day of completion. Despite selling to a “cash buyer” this will be by bank transfer not a large duffel bag full of bank notes.

How soon is completion when a cash house buyer buys a house?

There is no fixed timeframe for completion if you are selling to a cash house buyer but generally you can get to completion faster than with a mortgage buyer due to the fact that they do not have to secure a mortgage to finance the purchase.

What is a cash buyer for a house?

A cash buyer is an individual or company that is in the position to buy a house without the need for a traditional mortgage.

How to get cash buyers only for your house

There are several ways that you can find cash buyers for your house. You can sell your house at auction. You can sell your house via an estate agent and get them to advertise the property as “cash buyers only” or you can approach a cash house buying company who will value your house and make you an offer directly.

What makes a house cash buyer only?

A house would usually be advertised as cash buyer only if there was some issue that would make mortgage lenders unwilling to lend against the property, Japanese knotweed or spray foam loft insulation for example. In this instance it is impossible to find a mortgage buyer for the property making it “cash buyer only”.

Cash House Buyer Guru