Selling your home for cash - Is it right for you?

‘We buy any house’ ads are all over the internet. But is selling your property to a house buying company for cash a good way to achieve a quick sale? And how do you tell a genuine cash buyer from a disreputable one?

Find out more with our guide to selling to cash buyers.

The different types of cash sale

Buy house for cash companies

There are many home buying companies that advertise on the internet, claiming that they will buy your property for cash in a much shorter space of time than it usually takes. These are usually property investment companies. They will offer lower than the market value for your property, but will often promise to complete in 7-28 days. You don’t sell via an estate agent to one of these type of companies.

Traditional cash buyer

The other option is to sell to a traditional cash buyer – usually an individual who does not need to sell a property or require a mortgage to facilitate the purchase. They may be mortgage free and have significant equity from a much more expensive property. They could have a lump sum from an inheritance or be a first-time buyer who doesn’t need a mortgage. You can still sell to cash buyers through estate agents.

The pros and cons of a cash sale

Advantages of a cash sale

The main benefits of a cash sale is time. People look for cash buyers if they want a quick house sale. Cash house buying companies will sometimes not require surveys or searches to be done, and mortgage applications are unnecessary. Sellers can save on legal fees and estate agents fees, because either they are not needed, or house buying companies will cover them for you.

Disadvantages of a cash sale

The main drawback of a cash buyer buying your property is that cash offers will be significantly lower than if you were selling traditionally. A cash buyer knows that you want to sell quickly, so will make their offer with the expectation that they can secure the property at a discount. For cash buying companies this could be as much as 20-25% lower than the market value.

If you are dealing with cash buying companies you should also be wary of scams and underhand practices. Cash buying companies are unregulated – they have no code of practice to adhere to, or watchdog to investigate what they do. There is, however, a voluntary redress scheme run by the Property Ombudsman – any reputable company will be members of this scheme.

‘Gazundering’ is when buyers lower their agreed price just before contracts are exchanged. This is common in the cash buying world, when time is of the essence for sellers. It can be hard to pull out of a deal at a late stage, and cash buyers know they hold all the cards.

Selling a house for cash FAQs

Is it safe to sell a home for cash?

There are disreputable house buying companies out there, so you should be diligent before you commit to a cash sale. Don’t be persuaded to be tied in to an ‘option agreement’, in which you will not be allowed to sell your property to another individual or company for a set period of time (usually 6-12 months).

Also be prepared to ask for proof of funds from buyers.

Should I accept a cash buyer for my house?

If you have done your background checks on a company, and you are confident they are conducting themselves in the right way, then selling to a cash buyer can work for you. For example, a legitimate cash buyer will undertake a valuation of the property, and they will not ask you to pay for it. If they do, you should have cause for concern.

What happens when you sell your house to a cash buyer?

A cash sale has many of the same things as a traditional house sale: valuations, surveys, legal work, exchange of contracts and completion dates. However, bear in mind some of the following if you are selling to a cash buyer:

• Ask if the offer you receive is guaranteed
• Ask for proof of funds
• Do not believe them when they say they will pay market value
• Beware of tie-in agreements
• Do not pay for valuations or unnecessary fees

Get a free, no obligation valuation of your property

Even if you want a quick sale, it’s good to know the market value of your property. Please get in touch with us and we will provide a free property valuation for you.