If you’re exploring the property market, it won’t be long before you come across the term ‘cash buyer’. Like so many other pieces of estate agent jargon, at first glance Cash Buyer seems self-explanatory, but it can often be twisted and misconstrued...so we’re going to set the record straight here today.
Not only that, we’ll also take a look at the sales process when selling your apartment or house to a cash property buyer and go over the pros and cons associated with them, too.
Before we get to all that, though, let’s answer the burning question...
What does cash buyer mean?
The definition of a cash buyer is someone who can purchase property outright with money they have at their disposal; meaning they do not need to get a mortgage or loan to buy the home in question. A cash buyer must, however, have the money available at the time of making an offer to truly be considered as such, which is where the water can sometimes get muddied.
Some agents will claim to have a cash buyer ready and waiting for your sale, but in reality that buyer actually needs to sell another property first before they’ll have the money required to buy your home.
Strictly speaking, this does not a cash buyer make.
Is the sales process the same for cash buyers?
Essentially, yes - especially from a seller’s perspective.
The obvious difference is that a cash buyer will not have to obtain a mortgage, which means a lot less hoop jumping on their part. That being said, a wise cash buyer will want to do their due diligence and conduct the same checks that a lender would before agreeing to lend on a property.
What this means is things such as surveys and property searches will still be carried out prior to the sale being made, although these are usually dealt with far faster by a cash buyer than a slow moving lender.
Are there pros and cons with cash house buyers?
Now that we know what defines a cash buyer and that the sales process remains largely the same, it’s now time to look at the pros and cons of working with someone who has the money for your property ready and waiting in their account.
Many erroneously believe that selling to a cash buyer is all rainbows and unicorns, but not every cash sale goes through without a hitch. Let’s explore the advantages and disadvantages in a bit more depth.
Cash buyer pros
- Chain free: Being able to buy your home outright with cash that’s already sitting in their bank means that selling to a cash buyer does away with the dreaded property chain. The removal of a chain from the process means there will be less chance of the sale falling through because of a third party.
- Fewer hurdles: Just as removing the chain from the equation means there’s less chance of the sale falling through, doing away with the need to obtain a mortgage also has its benefits. Removing the need to raise the required finance means another huge obstacle has been dealt with from the start.
- More certainty: Cash buyers are generally long in the property market tooth and will only deal when they’re absolutely certain it’s the correct move to make. They will also be able to take comfort from the fact that not having a mortgage negates any concerns over future finances. In other words, repossession fears are not even on their radar. If they make a solid offer, the chances are good that they’ll follow through on it.
- They can buy anything: Short lease? No problem. Providing the cash buyer likes the deal on the table, they can go ahead and buy the property in question. This isn’t even an option for those who need to obtain a mortgage before moving forward, as lenders are loathed to back such purchases.
- Quicker sale: This is probably the number one reason why cash buyers are so desirable to those selling their homes, especially to those who are desperate to sell up fast. Again, removing the lender from the equation can dramatically cut down the time it takes to complete a sale, which is just what you want if you need to secure a quick move.
Cash buyer cons
- Low price: Although not set in stone, cash sales will often result in the seller receiving less than market value for their home. For some, this will be an acceptable price to pay if they wish to move quickly, but it’s important to go into any deal with a cash buyer with your eyes open to this possibility.
- Scams can happen: While rare, scams are unfortunately part of the cash buyer landscape. Happily, avoiding them is pretty easy, but people have fallen foul of scammers in the past, so be aware that it does happen. The easiest way to steer clear of scammers is to work with a reputable estate agent when selling your home. Putting your property up for sale yourself is asking for trouble. Don’t do it.
If you’re based in London or West Essex and are looking to secure a cash sale for your property, talk to us. We have been operating locally for well over a century and have a wealth of experience when it comes to making things happen in the property market. Give our team a call today to see what we can do for you.