When selling your home, you may hear the term “cash buyer” brought up as being a quick and easy way to complete the sale. Cash buyers are a growing force in the UK property market, both private individuals and specialty companies. Do you know why a cash sale wins every time? This article explores cash buyers and the advantages of having one.
What is a cash buyer?
In terms of buying property for sale, a cash buyer is someone who has the available cash amount to buy your property immediately, without needing to secure a mortgage or sell another property to do so. There are private individuals who qualify as cash buyers as well as companies that specialize in paying cash for property, such as Speed Property Buyers whose proud to say “we buy houses for cash”.
What are the advantages to a cash buyer?
♦Faster Sales
The average completion of a sale to a cash buyer is a few days in most cases, but no longer than one month on average. This is a dramatic advantage over using an estate agent, which takes from six to nine months. During this time, any number of delays can cause a non-cash sale to take even longer. The mortgage application process alone for some buyers can take longer, depending on their credit history and other factors.
♦No Chain
Property buyers often see “no upward chain” on listings, which means that nothing is holding back the sale, the property is available immediately. Unfortunately, the same cannot be said of buyers who are not in a cash position. In the UK, the term “chain” is used to describe the property buying and selling process, which is a linked sequence of purchases that depend on each other to continue through to completion.
♦Chain breakers include:
- Forgetting to sign contracts
- Not returning phone calls
- Getting cold feet
- Buyer circumstances change
- Finding a problem with the property
- Mortgage denied
Of course, any or all of these chain breakers cost the seller time and money. Cash buyers, as you can probably tell, do not have most of these weak links, as they have the cash available immediately to complete their links in the purchase process.
♦Guaranteed Sales
A cash buyer is an almost guaranteed sale, while unfortunately other types of sales fall through. In fact, one third of property sales to non-cash buyers fall through for various reasons. The prospective buyer may find that their circumstances of change or that the process is taking too long. They may find another property they like better as time drags out for the sale to be completed. Other prospective buyers are turned down for their mortgage application, which is becoming a very common struggle as banks tighten their lending policies. More than the inconvenience of finding a new buyer, when the property sale falls through it costs the seller an average of £2,899 in lost time and fees paid.
♦Contingent Repairs
Estate agents want to make their sales easier and one way to do this is to ask the seller to make all kinds of improvements and repairs. Adding a conservatory or extension on down to a fresh coat of paint, estate agents have made it a practice to hold up a buyer wish list that sellers often have trouble meeting. These improvements and repairs can get costly and eat into the profit margin of selling your home.
Cash buyers are ready to buy the property in the condition it is in, saving time and protecting your profits. In many cases, cash buyers are prepared to buy properties that need extensive renovation, even those that have been vacant for a long time, or have been neglected and require extensive renovation.
♦Probate Property
Probate means that the property is part of an estate of someone who has died. During probate, debts that the deceased has left behind and assets, such as property, are distributed according to their wishes. People who inherit property that is tied up in probate are responsible for taxes and other costs during the settlement period.
Selling probate property is a complicated process, one that regular estate agents often will not touch. Cash buying companies, on the other hand, employ legal experts that make the sale of probate properties much easier and much faster than other channels. If you inherit a property, the last thing you want to worry about are the costs associated. Cash buyers eliminate middlemen along with fees and delays to complete a quick sale. A cash buying company will have a specialty probate buying team that will help you through any questions about estate taxes and probate sales.
♦Save Fees and Costs
Cash buyers typically do not require legal fees or contracts to complete the sale, while estate agents typically charge their own fees as well as solicitor fees in order to complete the sale. Additionally, council taxes and other bills can also add up to eat into the final sale price. Cash buyers have no contracts and therefore they have no solicitor fees. They are not estate agents so there are no agent fees. Additionally, the speed of the sale means that the buyer will be paying the council tax, as the due date will fall after the sale is complete.
♦No Viewings or Sale Boards
On average, a property for sale is viewed by potential buyers almost twehomenty times before a sale is agreed. That is a lot of inconvenience for the seller, who must be sure to keep the property clean, void of clutter and personal possessions and empty every single time. It can be a stressful situation as a seller to look for a new property and plan to move, whilst simultaneously keeping up the standard required by estate agents showing your own property for sale.
Sale boards seem to stay up forever, even with gentle reminders from the local authorities to take them down in a reasonable time. While they are a useful, inexpensive marketing tool, sale boards are ugly and can even be a security risk, giving the impression that the property is vacant. A cash sale is a discreet, respectful way to sell property, with no advertising required, as the seller is the one to find the buyer ready to transact.
♦Convenient Timing
The cyclical property market is typically in favour of buyers in the spring of the year, with more home sales taking place then for various reasons. Sellers who need to transact in the autumn or winter risk a lower sale price or longer time on the market. Cash buyers do not depend on these market cycles and are ready to buy at any time of year for a fair price. Cash buying companies will typically allow you to stay in your home until it is convenient for you to move, unlike other buyers who typically are moving out of their own property by a certain date.
Avoid chain nightmares, extra costs and fees and look for a cash buyer for your property. Not only will you have a low-stress sale, you will also have more profit at the end of the transaction. Do not fall for those estate agents who claim to have cash buyers, as most of the time they want to start the chain. Be sure you have a true cash buyer by getting a free estimate from an accredited buying company.
Have you considered selling — or sold — your home to a cash buyer?
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