If you're selling your house, you may have come across buyers who offer to pay in cash. In this post, we explain what exactly a cash buyer is and whether selling your house to them changes the process.
What is a cash buyer?
A 'cash buyer' is someone that can buy a property completely with their funds, without any need for mortgages or loans. They are usually investors who buy properties to renovate and resell them at a higher price.
What happens when you sell your house to a cash buyer?
Generally speaking, not much will change in the selling process. You'll still need to go through the same steps including preparing your home for viewings, finding a buyer, signing contracts and closing the sale.
The only difference is that cash buyers can often make the selling process quicker than those relying on mortgages or loans, due to not needing approval from mortgage lenders.
Benefits of selling to a cash buyer
1. Quick closing
Cash buyers typically close faster as they can avoid the lengthy loan approval process. This can be beneficial if you're in a hurry to sell.
2. Less risk
With a cash buyer, you avoid the risk of a potential buyer's mortgage application being denied or delayed. And with 32% fewer loans being approved in 2023 compared to 2022, this could be a significant factor when it comes to choosing between buyer offers.
3. No valuations
Often cash buyers don't need valuations, which can speed up the process and remove the risk of a deal falling through due to a down valuation. Take a look at our guide to down valuations to find out more.
4. Selling 'As Is'
Cash buyers often accept properties as they are, potentially saving you time and money on repairs and renovations.
Cons of selling to a cash buyer
1. Selling price could be lower
Cash buyers often offer lower prices than traditional buyers since they are looking to make a profit on the sale.
2. Less negotiating power
Cash buyers usually have more leverage in negotiations because they know they're able to achieve a quicker sale than most. This means you may not be able to get as much out of the deal as you would with a traditional buyer.
3. Fewer buyers
Not all buyers have the necessary cash on hand, so if you're banking on a cash buyer this could limit your pool of potential buyers making it harder to sell your property.
Is it better to sell to a cash buyer?
Selling your house to a cash buyer can be a great way to speed up the process for those who don't want to wait on loan approvals. However, it’s worth bearing in mind that you may be offered a lower selling price as a result.
Also, it's good to keep in mind that there are other ways to speed up the process, for example, selling to a first-time buyer or those that are not part of a property chain where a group of home buyers and sellers are connected.
Ultimately, it’s important to do your research and understand all your options before deciding on how to sell your house. To help you understand the value of your home before you sell, book a free valuation with your local branch today so you can start your selling journey.