As you may be aware, there is a growing percentage of property buyers in the UK who are cash buyers. Whether you are selling or buying, there are several benefits to gain from relying on cash transactions for the sale. A lot of the stress associated with moving to a new house can be eliminated, for instance. However, just as is the case with anything else in life, there are also downsides to selling or buying a property with cash.
To help you decide whether it is the right option for you, we are going to look at the advantages and disadvantages of cash buying and selling.
Understanding the Term Cash Buyer
To clarify, in case there is any confusion, a cash buyer is an individuals or organisation that can make a complete cash offer for the property, that is not reliant on securing a mortgage or selling another property.
What are the Advantages of a Cash Buyer?
It can be very frustrating, disappointing, and expensive when a sale falls through on property. Choosing to sell or buy with cash only has some distinct advantages, therefore. Advantages like:
No Chance of Issues with Mortgages
Many failed property sales occur because the interested buyer has been unable to secure the mortgage they need. Obtain mortgages is a lot harder nowadays and even if a buyer has an agreement with a lender in principle for their mortgage, the company can still decide that they are not going to follow through on their agreement. When the sale falls through, it obviously means the seller needs to find someone else to buy the property, starting the whole stressful and time-consuming process again.
Eliminates Complex Property Chains
Property sales often fall through also because someone somewhere in the property chain changes their mind. It may be that the buyer has found a property they like more, or their personal circumstances and financial situations have changed.
When you sell to a cash buyer, however, there is no property chain formed other than that between you, the seller and the other party, the buyer. With fewer people involved in the process, you are less likely to encounter problems and everything is more likely to run smoothly, with the sale going through successfully.
Quicker Process
Selling property the traditional method can be a very long and drawn-out process. With a cash sale, the funds can be released quickly, and the deal can be completed in a couple of weeks or less, depending on the finer points and circumstances. This is much quicker than selling to a buyer who needs to organise a mortgage which can take a month or more.
When the process is quicker, there is less chance it will fall through, as your buyer is less likely to lose interest.
What are the Disadvantages of a Cash Buyer?
When the process is quicker, there is less chance it will fall through, as your buyer is less likely to lose interest.
Cash Offers Are Less
Generally speaking, a cash offer will be less than the full market value for your property. Especially if you are selling to a cash property buying company, as they are not legally obliged to offer the full amount for a property. Whether the cash buyer is an individual who is looking to buy a property for themselves or a company looking to make a decent profit on the eventual sale of the house they buy, it may not be the best option.
It Could Still Fall Through
Although the fact they don’t need to secure a mortgage makes it less likely that a sale will fall through, it can still happen. Although they are not relying on a loan being approved, they can still change their mind. This is why you should opt for a company like The Homes Buyer if you are looking to sell your home to a cash buyer, as they will always follow through on and will never change their mind, even if there are issues with the property.
As you can see, there are some great positioned and negatives about going down the route of selling or buying a property for cash. It is a good idea to weigh up these pros and cons and compare them to the pros and cons of selling and buying with a mortgage to determine which is best for you.
