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If you’re planning to sell your home, you may have seen the term “cash buyers only” on other property adverts during your research.
So what does this mean? What is a “cash buyer”? Are sellers actually allowed to list their houses for cash buyers only? If this is the case, what are the benefits of requesting cash buyers only for your own property?
Read on to discover the answers to all of these questions and more.
A cash only house sale is a transaction that requires the buyer to already have access to all of the funds required to purchase the property in question.
This does not mean “cash in hand”, but rather it stipulates that the relevant finances should be readily available to the buyer – whether in their bank account or in another immediately accessible location.
As a result, they will not have to apply for a loan or any other form of funding.
Buyers who rely on a mortgage do not count as cash buyers. The term also excludes house hunters who are subject to any form of chain.
“Chain” is a term used to describe the string of purchases that must be completed before your own transaction can be fulfilled. A chain affects the flow of funds and the capacity for buyers and sellers to move out of one property and into the next within a particular time frame.
For example, perhaps a buyer is interested in your property, but they will not have access to the funds to purchase it until they find a buyer for their own property and close their own sale. This is a chain.
In some cases, chains can have huge numbers of “links”. Your buyer could be unable to pay you until they have exchanged contracts on their own property with another buyer, who needs to find a buyer for their home before they can pay your buyer.
As you can see, this matter can become very complicated, and issues further along the chain may even lead to your transaction falling through. This is a very regular occurrence, in fact, and one that is a notorious potential pitfall of almost any traditional property sale.
For this reason, properties advertised with “no chain” are particularly popular among buyers – and buyers who are not at the mercy of a chain are always preferred by sellers.
For further information and advice regarding property chains, see this helpful guide.
Specifying “cash only buyers” for your property sale is absolutely permissible on virtually any platform – and the upsides of doing so are clear. There are two major benefits of selling your property for cash, which we will investigate below.
First and foremost, cash buyers will usually be ready to move in as soon as the contracts are exchanged and the sale is closed. They won’t need to wait for a mortgage to be approved or for another property to sell.
This means that you’ll be able to complete the transaction very quickly – so if time is of the essence, this approach will almost certainly suit you best.
If you sell to buyers who are awaiting mortgage approval or the completion of a chain, you’ll always be taking something of a risk.
After all, what if their loan application is rejected? What if a buyer or seller pulls out further up the chain, leaving your buyer without the funds to complete their transaction with you?
Specifying “cash buyers only” will allow you to feel much more confident that your sale will go through. However, it is important to remember that setbacks and problems are possible even without a chain or a buyer who is reliant on a mortgage.
It is worth noting that just because you have a cash buyer, it doesn’t mean the successful completion of your transaction can be absolutely guaranteed.
There are a number of reasons why a cash buyer might decide to pull out of a sale. These include:
However, the likelihood of the transaction falling through is still much lower in a cash sale than it would be with a mortgage buyer, or a buyer who is part of a chain.
We’ve already covered some of the key reasons why you might decide to sell your house to cash buyers only. The dual benefits of speed and security are strong motivators to any seller.
However, there are numerous other situations in which a homeowner may decide to only accept cash offers. Often, you’ll find that a property being sold for “cash only” is:
What are the downsides of listing your property as “cash only”? Problems are fairly rare, but the following issues do have a chance of negatively affecting the success of your transaction.
In requesting offers from cash buyers only, you will automatically reduce your pool of potential buyers somewhat. The fact of the matter is that there are far fewer cash buyers than there are house hunters who are reliant on a mortgage or chain.
This doesn’t usually pose a problem, but, as a result, you may find that it takes a little longer to generate interest – particularly in a tough market.
It is worth noting, however, that the overall sale process is still likely to be speedier with a cash buyer than with a mortgage buyer or a buyer who is part of a chain, despite the potentially lengthier waiting period before you receive the offer you want.
Speaking of getting the right offer, the main pitfall of marketing your house to “cash buyers only” is that house hunters of this kind are generally more likely to make a low offer.
Those with the resources to purchase a property without a mortgage – and with no reliance on a chain – know that sellers are often willing to knock their asking price down a few notches in exchange for a quick and stress-free sale.
Often referred to as “cash buyers’ discount”, homes at the centre of a cash-only transaction can be expected to sell for an average of 9% less than they would to a mortgage buyer, or to a buyer who is subject to a chain.
There is also the issue of money laundering and other scams. It’s always a good idea to try to learn a little about the source of your buyers’ cash. Their solicitor should have taken steps to do so already, but it is possible for some cases of this kind to slip through the net.
As we’ll explain in further detail below, some buyers have a negative preconception about “cash only” property listings.
When stipulating that you will only sell to house hunters who are planning on buying your property with cash, you need to be aware of the impression you are putting across.
The majority of “cash only” sellers only use this method for their own ease, or because they need the transaction to move swiftly – and this is quickly becoming common knowledge.
However, some house buyers will still approach cash only properties with a sense of caution. This is due to cash sales occasionally being specified by sellers whose properties are:
Of course, it is perfectly reasonable and acceptable for a seller to put a home of this kind on the market for cash offers only. However, it is vital that the type and condition of the property is detailed within all public listings and documentation relating to the sale.
Concern arises when properties with structural defects or a very unusual design or fabrication style are listed without this information being openly provided.
In cases of this kind, the seller may be suspected of trying to dupe a cash buyer into parting with their funds quickly in exchange for an unsuitable property.
However, these instances are very much in the minority, so a request for cash buyers only should not be a cause for concern in and of itself.
It is worth noting that sellers may list themselves as “open to cash buyers”, rather than stipulating a firm “cash buyers only”. This is perhaps more likely to attract the right kind of buyers without setting off too many alarm bells.
As with any property sale, it’s important to have access to a very good estimate of your home’s value before you decide to list it.
This is the case whether you decide to sell privately, via an estate agent, at auction or using any other method.
While you will need to take into consideration the possibility that a cash buyer may offer you an average of 9% less than your asking price, it’s also important that you do not try to overvalue your property to rectify this “loss”.
Setting too high a figure will put off savvy house hunters. It may even prevent your home from turning up in the relevant search results on property portals and agency websites.
Cash buyers, particularly at auction, are likely to have a good understanding of typical property values. If they do not, it’s very easy for them to undertake a little research.
For this reason, it’s a good idea to arrange a valuation – either with an estate agent of your choice, or with an independent RICS registered surveyor.
You can also generate a ballpark estimate of your own by searching for the sales figures of comparable properties in the same area that have changed hands recently.
“Comparable” means that they should:
If the amount at which you are planning to list your house is very different from the recent figures associated with these comparable properties, you may be making a mistake.
As a result, your home may languish on the market for far longer than you had hoped, and you may be forced to drop your price even lower before a willing buyer can be found.
Of course, as well as undertaking research yourself, engaging a property specialist to value your home as accurately as possible before listing it is always highly recommended.
Along with studying comparable properties, an estate agent or surveyor will:
This will help them to calculate your property’s value far more precisely.
Estate agents will usually value your home for free in the hopes of attracting you as a client.
Independent surveyors, on the other hand, come with a cost. However, their results are potentially more accurate, as they have no vested interest in your sale and so will have no reason to inflate their figures in order to satisfy you.
Pricing your home incorrectly may result in you receiving no offers at all – whether from cash buyers or not.
It is acceptable to specify that you require cash offers only however you choose to sell your home – whether you do so privately, through an estate agent or via auction.
When engaging with an estate agent at the start of the property sale process, it is important to specify as early as possible that you will only be accepting cash offers. The majority of agents will facilitate this, but it’s always important to make sure they understand your intentions.
Major UK property portals – such as Zoopla and Rightmove – display “cash buyers only” listings.
Once you have made all necessary arrangements with your chosen estate agent, they may list your house on a portal of this kind with the phrase “Cash Offers Only”, “Cash Buyers Only”, “Cash Purchase Only” or similar preceding the property description.
If they do not display this information, they should at least make the condition clear to any buyer who expresses interest in your property.
Most “live” (read “in-person”) property auctions also handle cash only purchases. However, this type of auction sale is less universal than it used to be.
It is now possible to arrange “auction finance” via many auction houses. The use of bridging loans is also becoming more and more acceptable.
The swiftly-advancing “modern method of auction”, also known as a conditional auction, should also be taken into consideration. This type of sale usually takes place online and requires the top bidder to pay a non-refundable deposit in order to “reserve” the property.
This precedes a period of 28 days in which the buyer must get all of their affairs in order – including instructing a solicitor and securing funds. From there, they usually have an additional 28 days to complete.
In this way, more and more mortgage buyers are able to purchase property at auction, which means that this method of sale is no longer the sole domain of “cash buyer only” transactions.
However, it is worth noting that cash buyers are still vastly preferred by many auction houses and auction sellers, and some transactions are still executed solely in this manner.
It is also possible to sell your home for cash on online auction sites such as Gumtree, Trovit and even eBay – though the latter displays a disclaimer to the effect that property listings displayed on the site do not constitute a binding offer to sell.
Many specialist sites allow you to list a cash only property for private sale without paying estate agency fees. These include The House Shop, Home.co.uk, Property Heads, House Ladder, Mouseprice, Placebuzz and more
You can check out independent and regional property pages too, such as Homes 24, as well as “fixer upper” specialists like the London-only Property Renovate and Wreck of the Week.
In addition to the above, there are also companies that entirely specialise in buying homes for cash.
Another way to ensure cash offers only on your property is to seek out specialist companies that buy houses from sellers directly.
These organisations may be referred to as:
In many cases, companies of this kind do away with the need for an external buyer at all.
Fast home buying or property sales organisations enjoyed fairly low levels of popularity in the past. However, standards of practice and levels of accountability have significantly improved within the industry.
For this reason, more and more sellers are realising that the use of this type of organisation is often the swiftest and most efficient manner of selling property for cash.
One of the reasons why organisations of this kind are increasing in popularity is that they are often considered low-risk compared to a traditional “open market” estate agency.
Not only are they usually run and managed by real estate experts who know exactly how to get the best price for any property, but – if you agree that a company may buy your home from you directly – there will be no chance of any external buyer dropping out.
What’s more, the seller’s legal and sales fees are usually covered by their chosen home buying company, and the whole process can be managed in a swift, straightforward and streamlined manner.
Traditional property sales are notorious for being stressful and drawn-out, which means that sellers are usually keen to find a platform on which to sell their house that provides a quick and simple service. In many cases, fast home buying and selling companies offer just that.
There are several ways in which a fast home buying and selling company may manage a transaction.
Most commonly, the homeowner gets in touch with the company to provide details of the property they wish to sell. The company then responds with an initial valuation and cash offer.
They may then call upon a carefully curated network of buyers to purchase the property, or they may simply make the seller a cash offer up front and take on ownership of the home themselves. Many do both!
Sales via these channels are often totally private and can be completed in as few as one or two weeks. This is significantly quicker than the 2022 UK average of 18 weeks taken to sell a house on the open market.
Typically, fast property sale or home buying companies can offer a seller between 75-80% of their home’s fair market value.
While instances of this kind are getting rarer, one of the most notorious risks of the fast home buying industry is the potential for businesses to take advantage of sellers by heavily reducing their offer as completion nears. This enables them to make more of a profit.
By this stage, the seller will have made firm arrangements associated with the sale and may find themselves forced to accept a significantly lower sum than expected.
Other potential risks include:
If you decide that your best course of action is to utilise a fast property sale company in order to achieve a cash sale, you should take care to undertake diligent research before you select your service provider.
You should always investigate the following:
There are currently no official regulations governing the fast home buying industry specifically.
However, you can find out whether a particular organisation of this kind can be trusted with your property, your data and your money by checking whether they are a member of the NAPB (National Association of Property Buyers).
They should also be regulated by the Property Ombudsman Scheme (TPOS) and recognised and approved by the Chartered Trading Standards Institute (CTSI). Additionally, they should have evidence that they follow the government’s money laundering regulations.
The above details will most likely be displayed on the company’s website. If they are not, you should contact the organisation directly in order to check.
You should also double-check this information with the websites of the bodies with whom the company claims to be registered.
Another sure-fire way to check the authenticity and quality of any property buying or selling company is to take a look at their online reviews.
Both Google and allAgents – the UK’s top property agent review site – should display client and customer feedback about the organisations you are considering. Generally, the higher the quantity of positive reviews a company has, the more trustworthy they are likely to be.
Selling your house for cash can be extremely beneficial in a number of ways.
Firstly, it can help you to save a huge amount of time – as you won’t be relying on a buyer securing a mortgage or waiting for the completion of a chain of transactions.
Secondly, it guards you against the risk of a buyer dropping out.
You can sell property for cash via an estate agent, at auction or with the assistance of a fast home buying company.
While a seller’s request for “cash buyers only” may come as the result of their property being un-mortgageable or in poor condition, it may also be that they simply require a quick, stress-free sale for one of many possible reasons.
We hope that this guide has given you a detailed insight into the “cash buyers only” approach to property sales.
If you’d like to learn more about selling your home for cash without relying on chains or offers from buyers on the open market, all you need to do is to get in touch with us today.
Simply provide us with information about your property and we’ll make you a cash offer, along with a free valuation.