There is no denying that moving your house is a stressful experience. If you talk to people who have recently moved their house, they will probably tell you that moving is not the most stressful thing, but most of the stress comes from the risk and uncertainty of the deal falling through. This is why some people believe that selling their home to a cash buyer is the best way to avoid stress. This article will explore the pros and cons of selling the house to a cash buyer and if there are other ways to avoid the stressful experience of moving home.
Define a Cash Buyer
In simple terms, cash buyers are property buyers that purchase a property with their own money. Cash buyers have the funds readily available when they make the offer. For instance, a buyer that is dependent on another property getting sold to be able to buy your home won’t be a cash buyer.
Which Homeowners Should Look for a Cash Buyer?
Homeowners looking for a quick sale
Getting a mortgage approved takes a long time. These lenders perform various checks to ensure that the property is fine and there won’t be any problem when it comes to repayment. It’s a slow process which affects the sale of a property. On the other hand, there is no such delay when selling to a cash buyer as they already have the money. They don’t need the mortgage, which allows sales to go through quickly.
Homeowners burnt by deals that have fallen through
Mortgage lenders are not allowed to approve mortgages for borrowers who are unlikely to meet their repayment criteria. If a house has received an offer from a potential buyer whose mortgage doesn’t get approved, the homeowner has to start from scratch and put their home back on the market. Such homeowners are disappointed with the process and often want a cash buyer to get the money quickly.
Homeowners with property in poor condition
If your property isn’t sound, it is unlikely to get a mortgage approved, and, in such cases, cash buyers are the only option for the homeowner.
Pros of choosing a cash buyer
The process is relatively simple as there is no complicated process to get the mortgage approved, limiting the risk associated with the deal due to a third party.
Many house deals fall through due to a variety of mortgage issues as the buyer is not able to get a mortgage. There is no such risk with a cash buyer as they don’t need a mortgage.
Cash buying is much quicker than getting a mortgage approved by a lender. It significantly cuts down on the time taken to close the deal.
Cons of a cash buyer
In many cases, the offer made by cash buyers is less than the asking price as cash buyers are aware of the advantages offered by them. It gives them an upper hand, and they might ask for a discount on the asking price.
While cash sales often go through, there is always the risk of the deal falling through due to a late change of heart on the part of the cash buyer.
Real estate is an industry that is prone to scams. It could be anything ranging from last-minute price reductions to hidden fees. Whether you like it or not, the cash buyer market has its share of scams. You should always choose a reputable real estate agent to stay away from scammers.
Process of selling to a cash buyer
As far as the process of selling the home to a cash buyer is concerned, it works similar to any other real estate deal. The only difference is that a mortgage does not need to be arranged by the buyer.
Ask the buyer to show proof of funds.
If you have received an offer on your property from a cash buyer and claim to have cash ready when buying your property, you need to get your real estate agent to ask the buyer to provide proof of their financial status. If the cash buyer has the cash, they won’t need to sell their property before being able to provide the funds for buying your property.
A simple rule of thumb is that if a buyer cannot provide the proof of funds in their bank account, they are not considered a cash buyer. You need to know this, and it is up to you whether you want to accept their offer or wait for something else.
Property search will still happen.
A mortgage lender will always get a property searched before approving the mortgage. In the case of a cash buyer, such searches are still going to happen, but this will be done, on their behalf, by their conveyancing solicitors. The search will typically include the land registry title plan, regulated drainage and water search, and local-area examination. This is why you need to consider this when finalizing details.
They might want to have a survey.
A cash buyer is unlikely to ask for a mortgage evaluation survey, but they might want to get the home survey done to be aware of any potential issues with the property. If they discover any problems, they will likely ask you for a discount, or they might cancel the deal altogether.