But how do you attract a cash buyer?
In this article, we go through what exactly a cash buyer is, why you might want your property to appeal to a cash buyer – and importantly, how you go about doing that!
There are a few different ways that you can find a cash buyer, or you might want to explore using a cash house buying company, but is that necessarily the right choice for you? Well don’t worry, we’ll go through everything and you can quickly navigate using our table of contents below:
A cash buyer, or cash house buyer, is anyone that can purchase a property outright without the need for a loan, mortgage or the sale of another property. It’s actually a fairly common method of buying and selling property.
It’s sometimes misunderstood, as some think they are considered cash buyers due to the sale of their property – but that’s not the case. The funds must be immediately available to buy the home outright.
If a cash buyer approaches you to purchase your home, you should ask for proof of funds either directly or through your estate agent. They will need to show that they have the funds available in their account, and how they got them.
The short answer would be yeah, as cash buyers usually operate far quicker than a traditional buyer as it cuts out a significant step in the process, the approval time for a mortgage. Typically speaking people who buy with cash are investors or companies that regularly purchase property, which means that they tend to know what they are doing or have pre-existing relationships with solicitors which again reduces the time the process takes.
On the flip side, there are negatives to selling to a cash buyer. Generally speaking, a cash buyer is in a strong position when looking to purchase a home, due to the speed of completion, so they tend to look for a discounted figure against the market value.
Your traditional cash house buying is by nature an investor in property, and although it’s not always true, generally they will be looking to either renovate and flip your home or rent it out as a Buy To Let. Keeping that in mind, if your house fits the bill for either of those types of investors then you might well attract a cash buyer.
An investor looking for a flipping opportunity will be interested in houses that need work, so if you’ve been putting off renovating your kitchen or improving your general décor, contrary to what you may read online, it might be worth leaving if you want to attract a cash buyer! Investors that are more interested in letting the property out will mostly be concerned with the yield that the property can obtain, and the way that you can work this out is to look at the rental prices of comparable properties in your area. Then determine your sale price divided by the property's annual rental income then multiple by 100. If your figure is north of 7-8% then your property will likely be of interest to BTL investors.
It really depends on your current situation and what you value more. Typically cash buyers will try and get your property at a discount of between 10-20% on the true market value of your property.
You may be required to sell to a cash buyer if your property is deemed unmortgageable, as mortgage lenders won’t rent to it so you literally have no other options – but you should definitely research this and find out if it’s actually the case.
The other reason you would take a cash buyer's offer is if the time is important to you. As we’ve touched on, cash buyers can generally buy a lot quicker than a traditional buyer, allowing you to avoid costly mortgage payments, and bills over the duration of the sale, and if you are in a tricky situation such as a divorce or at risk of repossession, it can really help.
If you’re determined to find a cash buyer for your property then there are actually a few ways of trying to attract them, outside of having a property that would typically appeal to a cash buyer.
You can actually talk to conveyancers and solicitors to find a list of potential cash buyers by looking for people who have properties in the area but don’t have a mortgage. If you can acquire this list, then you can actively target them, either through cold calling, email or social media typically.
Most cash buyers are on the lookout for a good deal, so you need to price your listing attractively to appeal to that audience. You should research comparable properties in your area and determine whether you have priced your property below market value.
Sometimes estate agents will have lists or know of cash buyers who are ready to buy quickly, and if you let your intention of a quick sale at a discount known to them, they might be able to match you up with someone before even putting your property on the market.
You can actually put on your listing that you’re only taking offers from cash buyers – which may help, but it also alienates a large portion of the market, so we would only advise doing this if it’s essential that you get a quick cash sale.
Another alternative is the rise of cash house buying companies, such as ourselves. Obviously, we’re a little bit biased here, but we’ll try and remain as neutral as possible! A cash house buying company often referred to as “We Buy Any House” or “Sell House Fast” companies essentially purchase homes at below market value in return for a quick sale.
Ourselves, for instance, we are able to buy your home in just 7 days – but as mentioned, our offer will be below market value. Your next question obviously maybe, well how much below market value? That’s a really hard question to answer, selling a property isn’t like selling a loaf of bread, there are so many different variables to take into account, not to mention our valuation of the property might be lower or higher than expected.
What we will say, getting an offer on your property from a company like us is completely no-obligation, it usually only takes a few minutes of your time over the phone for us to provide an initial indication. At this point, you can walk away or allow us to provide you with a more in-depth valuation and official offer.
It’s also worth noting, we cover the costs of aspects like solicitors and surveys, and not to mention there are no estate agent fees. So it’s worth finding out what a cash house buying company could offer, right?
The only thing you have to be careful with is there are some unscrupulous cash house buying companies out there. We’ve seen complaints of some companies reducing their offer right at the point of exchange and completion. Doing something like this however would be against The Property Ombudsman’s codes of practice, if there is no genuine reason for reducing the offer at that point, so always look to see if the company are a member of that Ombudsman.
We are always transparent, upfront and honest with our customers, and the only reason we would have to reduce an offer is if there are major issues when the RICs survey comes back, such as structural problems, that we had been unable to determine prior to the survey taking place. On the odd occasion, this does happen, it’s completely out of control as the owner of the property, and ourselves, won’t know about it until the independent survey has taken place – but we will let you know about any issues as soon as we are aware.
If you’re selling your house for cash, then you’re likely to need to sell your home quickly – so the last thing you want is to be let down quite far into the process, causing further issues, stress and hassle. We’ve noted down a few things to be aware of, consider and perhaps check when selling or trying to sell to a cash buyer.
Is it right for you? I know getting a cash buyer may seem ideal, after all, time is money. You should only really use cash buyers or a cash buying service if you want to sell in a short period of time. If you can wait for something like the open market, even considering companies like us cover most of the fees, you will still likely come out with an overall higher amount.
If you are dealing with a house buying company, then you should always make sure there registered firstly with The Property Ombudsman & secondly the National Association of Property Buyers. These are two options schemes that companies can join, but they add a layer of protection for the customer, as they offer an independent resolution dispute service between consumers and property agents – with a strict code of practice that agents have to stick to.
There’s nothing that speaks more true of how a company deal with their customers than the actual customers themselves. We advise that you check through online review platforms such as Trustpilot, and read through some of the reviews, both positive and negative to get an overall opinion of their service.
If you’re selling to a cash buyer that isn’t part of a house buying company, then they won’t be part of The Property Ombudsman, or have their own reviews, so how do you check they are legitimate? The only thing you can really do is ask them for proof of funds, or get your estate agent to ask them, you should also ask to see proof of how they acquired those funds.