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Cash buyers can be a great way to sell your house or flat on a speedy schedule but there are some potential negative aspects of this approach that you should learn about. This guide details the various steps involved with getting your property ready to sell to a cash buyer, as well as some alterative options for trying to attract a fair and fast offer for your home.
- What are the ways that I can sell my property for cash?
- The advantages of selling a house or flat for cash
- Potential downsides with selling a home for cash
- Preparing your property when selling it for cash
- Alternative options to selling a flat or house for cash
- Selling a home for cash: frequently asked questions
What are the ways that I can sell my property for cash?
One of the most important decisions that you can make when preparing to sell your freehold or leasehold house or flat is selecting the strategy that you will use to find a buyer. And one popular approach that many homeowners in the UK use is selling to a cash buyer.
Cash buyers are a legal way of selling your home and distinct from selling via a property auction or selling with an estate agent, as Money Helper notes. That’s because they avoid the need to involve mortgages in the selling process, the sales are often completed on a far accelerated schedule, and this option also avoids some of the hassle of other methods such as many viewings where potential buyers get to tour your home.
The first category of cash buyer is house buying companies, also referred to as quick buyers or cash buyers. These are companies like LDN Properties that make speedy and competitive offers to purchase almost any category of home, regardless of any structural or other issues.
The second category of cash buyer is a private individual that has the ability to offer a quick cash payment for your home. This means they do not need to first get approval from a home loan provider to secure a mortgage that would cover the cost of purchasing your property. These buyers will often be found when you attempt to sell your home without any assistance, although you might experience them in rare cases when selling at an auction or via an estate agent.
For the purposes of this guide, cash buyers generally refers to those companies with the funds available to purchase your home right away and help you avoid a more complicated sale.
As you’ll see in this guide, as well as the pros of selling to a cash buyer, there is also the possibility of experiencing certain disadvantages if you decide to sell your house or flat using this method. There are also other alternative options available for trying to find a buyer for your home, but often the benefits of selling to a cash buyer far outweigh the cons.
The advantages of selling a house or flat for cash
Cash buyers are becoming an increasingly used option for many homeowners looking to sell. An article by Mansion Global suggested that by the end of 2023, cash buyers represented more than 30 percent of UK property buyers.
And that percentage is likely to keep growing in future years because sellers are increasingly discovering that there are a number of strong benefits of selling using this method, as they make for a streamlined, hassle-free and no-stress way to sell many types of properties.
Secure a faster sale
One of the main reasons why sellers like to use cash buyers is that the sale can happen within a few weeks, rather than the months or more it may take with an estate agent or an auctioneer.
Cash buyers already have the funds in place to purchase properties right away, with no waiting for an unspecified time to first get approval from a mortgage company to loan the money that they would need to purchase your home. This is how they can significantly reduce the typical timeline for selling to a handful of weeks, and that includes exchanging contracts.
Therefore, if securing a speedy sale of your house or flat is your top priority when selling, cash buyers will almost always be the quickest option that you have available.
Sell problem properties
Another reason why cash buyers are popular is that they are renowned for making competitive offers to purchase homes, even when the property has a major negative element.
By way of example, LDN Properties launched in 2003 and has looked at many problem homes throughout the UK since that time, including houses with a rentcharge, flats with mortgage arrears, properties that have old or faulty wiring, homes that lack a boiler, houses that score poorly on their Energy Performance Certificate, flats situated near to industrial estates, properties suffering from widespread damp issues, homes that have subsidence, half-finished houses, hoarder’s flats, properties that do not have an External Fire Wall Review form and more.
So regardless of your house or flat’s age, condition, location, shape, size, type or any physical damage or other flaws, a cash buyer could be a simple solution to get a fast sale.
Avoid paying commission
Legitimate cash buying companies like LDN Properties promise to never charge owners any commission when purchasing their homes. This ensures that you will receive the full proceeds from the sale, and it can be a great help in reducing your total selling expenses.
If you want to cut costs when selling, that makes cash buyers a great alternative to using an estate agent or selling at an auction. Those are two strategies for selling that will require that you pay the professional commission for the work that they do in finding a buyer for your home, usually at least a couple of percentage points of a property’s final sale price. This fee is taken out of the sale proceeds right away, which will increase your overall selling costs.
Potential downsides with selling a home for cash
Whilst there are many strong advantages to using a cash buyer when selling your property, you could also find that there are a handful of rare, but still possible, negative aspects about this method, and reading about them can help you decide which selling method to select.
Reduced offers
Another possible drawback of selling your property for cash is that some of the offers you receive may be significantly below the market value of your home, as Haart’s website notes.
Certain cash buyers will be aware that you are looking to sell as fast as feasible, and they will think that this means you’ll be willing to accept a vastly reduced offer just to make a sale happen. Some cash buyers might even try to offer up to 25 percent lower than your asking price, which in turn would dramatically lower the profit you could expect from a sale.
Don’t simply give in and accept a bad offer, because there are plenty of options when it comes to cash buyers and you can still get a competitive price – for example, LDN Properties is a quick home buyer that is known for making fair and fast offers for almost any type of home.
Hidden fees
Many cash buyers legitimately claim to be zero commission, meaning that unlike estate agents or auctioneers they will not charge a percentage fee of your home’s eventual sale price.
Unfortunately, you might experience some quick buyers – either individuals or companies – that will attempt to charge what they claim are administrative fees or other costs for buying your property. Whilst this not technically the same as charging you commission, it is a sneaky way that some cash buyers might attempt to get you to pay some type of fee on the sale.
To avoid falling for this trick you can simply ask the cash buyer if they will charge commission and whether they impose any other fees, and don’t sell your home to anyone that does.
Gazundering risk
When selling to a cash buyer you can sometimes run the risk of gazundering, which happens in a scenario where someone makes a good offer to purchase your home and then just before the contracts are exchanged, the buyer reduces their offer, which lowers your sale proceeds.
Some cash buyers try this trick because they know that many homeowners who are selling this way want to do so as quickly as they can, and therefore they might be reluctant to back out of the sale at that late moment even though it means their profit will be reduced.
If this situation happens to you, you will have to seriously consider when it makes more sense to fight the gazundering attempt and/or walk away from the sale rather than accept it, and that will be a decision that only you can make based on your needs from selling your property.
Preparing your property when selling it for cash
When a cash buyer is interested in your home, they will want to fully tour the inside and outside on a viewing before they make an offer. Thankfully, this is the only viewing you may need to endure, as many owners find viewings to be inconvenient, intrusive and time-consuming.
Pursuing just some simple steps can help to increase how valuable buyers perceive your home to be, and they require just a little effort and possibly a small cost in exchange for getting a better offer price.
For the exterior of the home, it’s a good idea to give a fresh coat of paint to the front door and your window ledges, along with replacing any broken glass, missing roof tiles and the like. If you’ve got a garden or other green space, then you should mow or weed it. First impressions are very important when selling a home, and a property that looks well maintained to a buyer when they initially approach it will be seen by them as more valuable than a poorly maintained one.
For the interior of your property, you should tidy up and remove as much clutter from all of your rooms as you can, because this will help to make the house or flat appear larger and worth more. If you have any pets, clean up after them an keep them locked away during a viewing.
There are larger-scale improvements that you could consider making to your home, for example fixing a major structural problem like subsidence. But this could take a lot of time, money and effort that many owners will simply not be able to invest, or want to do. The good news about cash buyers is that you’ll still get a fair and fast offer even with your home having this problem.
Alternative options to selling a flat or house for cash
If you are still undecided about whether to attempt selling your property to a cash buyer, there are a couple of other options available – selling with an estate agent or at an auction.
Below you’ll find specific details about the benefits and drawbacks of these two methods, which should help you with identifying the selling method that best suits your individual needs. It could help to write down your goal asking price, timeline for selling and any budget for fees and compare that against the details of the various selling methods to find your ideal match.
Selling your home through an estate agent
Homeowners can enjoy having minimal effort to exert when they sell with an estate agent. That’s because the estate agent will handle all the steps, beginning with the creation of a listing the describes your home and features photographs of the inside and outside. They will advertise this listing in local newspapers, online and in their office. Then they’ll schedule viewings for people to visit your home, following by hearing offers and aiming to take one to a final sale.
Although not having to do any of this work can help reduce a seller’s effort and stress, there are some negative aspects of selling this way, as Equifax explains, and these factors could easily eliminate any potential advantages.
One drawback is that you will have to pay commission when selling this way, and it’s usually charged within a range of 1.15 percent to 1.40 percent of a property’s final sale price. This fee is subtracted right away from the sale proceeds, which adds to your net selling costs.
Another problem is that someone buying this way can make an honest offer on your property but then change their mind and withdraw the offer, making the sale fall apart. They are allowed to do this without facing any penalties so long as contracts are not yet exchanged. You’d then have to start over finding a buyer, delaying your selling schedule even longer.
This outcome helps to explain why selling through an estate agent can often take several months at least but might also easily take more than an entire year to find a buyer.
Some estate agents also have a trick of quoting you a high sale price for your property despite knowing that it will only attract offers at a much reduced value. This is done to try to convince you to sell your home using their services, so they can profit from commission if it sells.
You can prevent falling for this tactic by doing some basic research, including visiting property sales websites and noting the past and present sale prices of homes like yours. Next, ask a number of estate agents to give you a free quote for the price they think your home can get in a sale. Finally, calculate the average of all these values to find a better guide to your sale price.
Selling your home at an auction
You could instead be interested in trying to sell your home at an auction, which is a gamble as you may not get any bids on your house or flat, which means it remains unsold. Then you would need to begin again with your search for a buyer, slowing the overall timeline for selling even further.
The auctioneer will do the bulk of the tasks needed to sell your home, starting with producing and advertising a listing to get bidders interested ahead of the auction taking place. They will then host the auction and, if your home sells, oversee the final steps to complete it.
It’s not a speedy option for selling your property because there’s a lot of waiting involved. There will be a pause of many weeks or months between the day that you decide to sell using this method and when the auction is held. And if your home sells, the buyer usually has 28 days to sign all of their required legal papers and complete the other steps necessary.
You may want to inquire with individual auctioneers about whether they could be open to setting a shorter deadline than 28 days for the buyer to finish these tasks. But be aware that some auctioneers may give the buyer even more than 28 days, making for a slower overall sale.
Some auctioneers will also ask you to choose between selling using the traditional method or selling with the modern method, and this often largely comes down to personal preference.
When using the traditional method, the auctioneer will advertise your home’s listing for many weeks or longer before the auction takes place on a set day and at a set time, with people able to place bids of ever-increasing value on the property for a brief period, and the top price bid when the auction ends is deemed the winner and the person that is buying your home. With the modern method, your listing will be advertised for a set number of weeks or months and during this time people can place bids on it 24 hours a day, seven days a week, with the top price at the time the listing eventually expires being announced as the winner and property buyer.
As part of the selling process this way, you will be asked to select a reserve price, and this is the lowest value at which you accept your home can sell. Remember that a single bid at this price is a legally binding agreement for you to sell the property, and the buyer could sue you to enforce the sale if you later attempt to walk away from it once the auction has been completed.
For that reason, you need to devise a reserve price that should produce some profit for you from the sale, even after paying the auctioneer their commission. If you don’t take this step then you are in danger of either selling the home around the value you originally paid, or selling at a loss.
The average auctioneer will charge commission at 2.5 percent of a property’s final sale price, and this is deducted right away from the final sale proceeds. You might be able to persuade an auctioneer to either have the buyer pay a share of what you owe, or for the auctioneer to reduce the amount of commission that they will charge you, so ask about these options.
Your questions answered about selling a house for cash
As a cash buyer, LDN Properties receives many queries from homeowners about selling to us, and here you can read our responses to the questions that we can receive.
Your top questions when selling a house for cash
Cash buyers are those people or companies that have the funds available to immediately purchase your leasehold or freehold house, flat or other type of property. They differ from selling via an auctioneer or an estate agent because those are two methods that involve many more stages to find a buyer, including viewings where people are able to tour your home.
One of the most important benefits of selling this way is that it should be very fast, perhaps even just a few short weeks, because there are no complications such as viewings, holding an auction or a buyer waiting to get approved for a mortgage that would slow the process. Cash buyers are also a great way to sell a home that has a structural flaw or other problem.
There are sometimes disadvantages of using a cash buyer that you might experience, depending on the buyer. One possible drawback is that the offer price you receive could be up to 25 percent lower than you might get when selling with an estate agent. Another issue may be cash buyers promising to not charge commission but still insisting on you paying some fees.
There are a number of simple tasks you can undertake to make your home appear more valuable to a cash buyer. Inside the property this can include cleaning all of your rooms and removing as much clutter as possible, because it will make the home seem larger. Outside the property, one step you can do is to mow and weed any green space you have.
If you decide to sell to a cash buying company, such as LDN Properties, then the typical timeline should only be a handful of weeks, and this covers the time required to exchange contracts and for you to receive the full proceeds. That’s a much swifter timeline than you can typically expect when trying to sell your property through either an estate agent or a property auctioneer.
No, and that’s another of the advantages of selling using this method – cash buyers do not charge commission, which will assist in reducing your overall selling expenses. That compares very favourably to the alternatives of selling via an auction or with an estate agent, as those two options will charge you commission that will be subtracted from the final sale proceeds.
The two typical alternative methods to seeking a cash buyer for your property are using an estate agent or trying your luck with a property auction. Whilst these methods can help with reducing your workload with selling, they nevertheless have a number of downsides that you might experience including high fees, taking months to sell and other negative issues.
