What does it mean to be a cash buyer when buying a property?
A cash buyer is someone who has the money required to buy a property already in cash. This means a cash buyer does not need a secure a mortgage, loan or sell something else (e.g. another property). They could be a private individual or a company that specialises in purchasing property for cash.
What are the advantages of a cash buyer?
When a sale on a property falls through it can be frustrating and costly. According to Which? 1/3 of all property purchases fall through after an offer has been made, this can be because
- Someone changing their mind in the chain.
There is no chain attached to a cash buyer. You are not waiting on anyone below you in the chain to sell their house.
- The buyer can’t secure the funds via a mortgage. The process of getting a mortgage has become harder, especially with banks lending less during the pandemic
Cash buyers don’t need to wait around for a lender, the money is already sitting in their bank account.
- A problem is found with the property in the survey causing the buyer to abandon the purchase
If there is something that might make a property ‘uninhabitable’ (no kitchen) or something that could affect the value of the property (subsidence) then a lender might pull out along with the buyer. However, a cash buyer is not tied a lender so can make the choice to take these risks on their own.
A cash buyer can prevent some of these problems arising and speed up the process of selling a property. However, may still change their mind or pull out of a sale. Are you capable of making a quick sale on your property? (for instance selling are you selling the property of someone recently deceased. If so, look at the SMHQ Leeds blog article on how to deal with probate<Understanding Probate>). A cash buyer might be for you!
Are there any downsides to a cash buyer?
A cash buyer knows that they are offering a quicker and more secure sale, so they might want a discount compared to a chain buyer. Consider the value of the time you could be saving (months or years could turn to days or weeks) and reduced stress. Alongside the money you won’t be wasting on a solicitor if a sale was to fall through.
Estate agents will stretch the truth on defining a cash buyer, someone with no chain and (first time buyers for instance) with a large deposit, or someone who is downsizing so they won’t need to secure a mortgage might be described as a cash buyer. If they don’t have the money sat in their bank account and need to ‘move a couple of things around’ they are not cash buyers.
At SMHQ Leeds we offer an honest and open service and will always try our best to accommodate your needs. If it’s a cash buyer you need make sure you include it in your enquiry form, and we will find the right buyer for you.