We reveal everything you need to know...
When buying or selling a house, you may come across the term cash house buyer or houses that are listed as ‘cash buyers only’ and wondered what this means and whether or not selling to a cash buyer is a good idea.
To help you decide if buying or selling a house with cash is right for you, we’ve written a guide on how long it takes to buy a house with cash, what the process is and how you can make sure your cash sale is safe, as well as so much more:
A cash buyer is someone who is able to buy a property without the need for any kind of additional funding, which is normally in the form of a loan or a mortgage.
In order to be considered a cash buyer, you must have the funds readily available to be able to purchase a property immediately. People can misunderstand this and consider themselves to be a cash buyer because they’re selling another property and therefore will have the funds to purchase a property, but to be a cash buyer you shouldn’t be reliant on a property sale to make a house purchase.
Sometimes houses will be advertised as ‘cash buyers only’, meaning the buyer doesn’t want anyone to offer on the property if they will require a mortgage in order to be able to afford it.
To be able to buy a ‘cash buyers only’ property, you will normally have to supply the seller with proof of funds to show you have the money ready and waiting in order to purchase. Due to anti-money laundering regulations, there will be some checks taken out on the funds to make sure they’re coming from a legitimate source.
It can be confusing when a house is being advertised on the open market as ‘cash buyers only’ – it’s hard to know if this is because the seller wants a quick sale, if the property is unmortgageable or if it’s something else.
Below are a few reasons why a property may be listed as ‘cash buyers only’:
The property is an inherited property, and the seller would like to sell it quickly to avoid paying bills
The property is old and requires a lot of work to get it up to modern standards of building
The seller needs to release equity quickly, whether it be to avoid repossession or to pay for a dream holiday
There is Japanese Knotweed on the property, meaning mortgage lenders are refusing to lend on the property
The property is in an undesirable or unsafe area, such as an area with a high crime rate or an area at risk of landslip, meaning lenders will be reluctant to lend
The property is leasehold with a short remaining lease, leaving a lender not wanting to lend on the property
The property has been damaged, for example by fire or vandalism, and so lenders don’t want to lend on the property
The seller has been gazundered and so now just wants to sell the property quickly to stop a chain break
The property is largely affected by damp, most lenders won’t lend or will request an insurance backed guarantee
Some sellers simply won’t want to be a part of a property chain and so will only want to sell to a cash buyer
The property has structural issues and so requires a large amount of work to be completed on the property
Buying a house with cash is mainly similar to the traditional property buying process, with the main difference being that the buyer won’t need to apply for and arrange a mortgage. Taking out the aspect of acquiring a mortgage is what speeds up the process significantly when selling to a cash buyer.
To help you understand, we’ve outlined the process below of buying a house as a cash buyer:
As we’ve mentioned, when buying a house with cash you’re cutting out the whole mortgage process, which can reduce the buying process by months.
Technically, when buying a house with cash, providing you choose a good conveyancer and your seller is fully on board with moving fast, there’s no reason why you can’t buy a property in as little as 4 weeks.
Sadly, this isn’t generally the reality when buying a house with cash on the open market, as estate agents and solicitors have other jobs, slowing them down on your sale. The reality when buying a house with cash will normally be that the process takes around 2 months, if not slightly longer.
If you’re a seller looking for a cash buyer, we could buy your house for cash in as little as 7 days. We have our own cash reserves readily available that we can use to buy your property and we will cover all the fees for you, including the legal ones, meaning not only can you sell your house fast, but you won’t have to pay a penny!
Just like with anything, buying a house as a cash buyer has both upsides and downsides. Whether you’re wanting to buy with cash or you’re looking to sell to a cash buyer, here’s a breakdown of the advantages:
As you won’t need to worry about getting a mortgage approved in order to buy a property, there’s less worry from both the buyer and seller’s side that there won’t be any problems with raising funds.
As a cash buyer doesn’t need to sell a property in order to fund their purchase, they’re a chain-free buyer. This will give confidence to both buyer and seller, as both parties will know the sale of the property isn’t bound by another sale going through.
We’ve touched on this throughout this whole guide but buying a house with cash will generally result in a quicker process. As a cash buyer completely cuts out the stage of applying for a mortgage and waiting for approval, the conveyancing process is reduced significantly. In some cases, as a cash buyer doesn’t have a mortgage lender forcing them to get a survey and searches, the buyer may choose not to have them, resulting in an even faster conveyancing process.
With the benefits of cash buyers being plentiful, you’re more appealing to sellers. This puts you in a great position when it comes to negotiation, meaning you’re more likely to get a lower offer accepted.
As a cash buyer, you’re not paying any interest like you would on a mortgage and so you’re therefore paying less money overall for your property. If you’re selling a cash buyer and choose to sell to a cash house buying company, like ourselves, then you’re saving yourself money on the fees, as we will cover all the fees for you, meaning you won’t have to pay anything to get your house sold ASAP.
A lot of sales fall through as the buyer can’t get a mortgage and of course this won’t be the case with a cash buyer.
As a cash buyer, you will own the property outright straight away, meaning there’s no third party involved and therefore no risk of a lender repossessing your house if you’re behind on mortgage payments.
Although, as we’ve shown, being a cash buyer does bring many positives, there are of course still downsides, which we have detailed for you below:
As a cash buyer doesn’t have a mortgage lender forcing them to get a survey and searches on the property, there are cases where cash buyers won’t get these done and therefore won’t find if there’s anything majorly wrong with the property until it’s too late.
Whilst a cash buyer has the money available and ready to invest in a property, all the money will be tied up leaving you with less flexibility further down the line.
Buying a house is a huge cost and so tying it up into a property is only a good idea if you have budgeted properly and can therefore afford general living costs too.
With a house being marketed as cash buyers only, it can normally be because there are issues with the property that will require a large amount of money spent on it. This means, as a cash buyer, you tend to only pick up problem properties.
A cash sale is less common than a traditional sale and therefore it’s less known about. As a result of this, it’s important you make sure the cash sale, whether you’re the buyer or the seller, is as safe as possible.
We’ve broken down some things that you need to do to make sure your cash sale is safe:
One way to make sure you’re not going to get a nasty surprise after purchasing a property is to carry out a survey. This is something that will be specifically requested by a mortgage lender, so won’t be a necessity with a cash sale. However, we recommend that you do take the extra time and money to complete this part of the process.
A property surveyor will be able to give you a full report on the property’s condition, including its structure, and any issues it may have. Your conveyancer will then go through the report and make you aware of any major findings, that may affect your decision to buy the property, or at least the price you’re willing to pay.
Property searches are another thing that a mortgage lender will force you to get that as a cash buyer you can make the choice yourself. Once again, we recommend you get property searches done on the house you’re looking to buy to avoid any nasty surprises further down the line.
Your conveyancer will organise these searches for you and will read through the reports in order to fill you in on any problem findings.
Searches that will be conducted involve a drainage and water search, a flood risk search, a local authority search and a coal and general mining search. These will all highlight things that will be important for you to know when both living in the property and if you want to conduct any work.
If you’re selling to a cash buyer, you will want to make sure they’re actually able to afford your property and that they are actually a cash buyer. In order to do this, it’s a good idea to ask for proof of funds.
If you ask for proof of funds and your buyer doesn’t want to provide it, then this is something you need to be cautious of, as chances are they either can’t actually afford it or they’re not really a cash buyer.
If you’re selling to a cash house buying company, you should check whether they’re a member of The Property Ombudsman (TPO) and the National Association of Property Buyers (NAPB). These are two organisations that provide protection for sellers in an industry that has no regulation.
Any company that is are a member of these organisations will have to follow certain rules and procedures and it will also mean, should anything go wrong, you can go to The Property Ombudsman with your complaint, and they will be able to deal with the problem for you.
We’re members of both TPO and NABP so you can rest assured we will always do everything by the book and you, as the seller, will always have a layer of protection.
If you’re looking for a cash buyer that can buy your house in as little as 7 days, then we could be the answer! The Property Buying Company is a fast cash house buying company that is owned and operated by property professionals, founded in 2012, with over 50 years of combined experience, to help you feel that you’re in safe hands.
As we mentioned earlier, we’re members of The Property Ombudsman and the National Association of Property Buyers, further emphasising why we’re the people you can rely on.
We also understand what it’s like to sell a property and all the stresses and worries that can come along with it, so we will always be up for a chat to listen to your worries, and we handle the whole process for you.
We’re also rated excellent on Trustpilot with over 1,000 reviews.
We will always be open and honest about our process and service – we will tell you upfront what we can offer, and we will keep you constantly updated, including any issues we face and how we will do our best to overcome them for you.
Compared to a cash buyer on the open market, we will cover all your fees and can complete in a timescale of your choice. It’s never been easier to find yourself a reliable cash house buyer!