Buying a house with cash in the UK puts a buyer in a much stronger position when it comes to negotiating the price. Buying a house for cash puts you in a strong negotiating position, as cash buyers can complete a sale much more quickly. Similarly, selling to a cash house buyer can be a good choice for sellers who want, or need, to sell their house fast.
Buying a house with cash also allows the buyer to be more flexible in the type of house they can buy, since buying a house with cash does not need the approval of a mortgage company for the sale to proceed.
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What is a cash house buyer?
It’s important to distinguish between the two types of cash house buyer. If a buyer owns their current property outright and doesn’t need a mortgage when they sell it to buy a new home, then strictly speaking, they are buying for cash. However, they’re still part of a homebuying chain and this means that they don’t have the same advantages, such as speed and certainty when it comes to buying a house with cash.
Being a true cash homebuyer means being able to buy a house with cash, without relying on an associated house sale. Private cash buyers have their own cash available to buy with, usually from savings, an inheritance, or a divorce settlement. Cash house buying companies either buy with their own cash, cash from investors or using an established line of credit from their bank, which doesn’t require individual property approval.
Is it better to buy a house in cash or to get a mortgage?
Whether they are a private buyer or a cash house buying company, a buyer is usually better off buying a house with cash than taking on the debt of a mortgage. They will not pay interest, as they would with a mortgage, and their property will usually provide a greater financial return than they would get keeping the same money in savings.
However, private cash house buyers still need to have enough money left over to live comfortably and maintain their property. If buying a house with cash takes up all of their resources, then they may be better financing at least part of the purchase with a mortgage.
The benefits of buying a house in cash in the UK
Opportunity to decrease costs
Buying a house with cash means buyers won’t have to pay arrangement fees for a mortgage. They can also avoid expensive surveys and searches if they are able to assess the property themselves.
No financing concerns
Buying a house with cash means buyers don’t have to fill out endless paperwork to gain approval from a mortgage provider, and they won’t be sweating on a decision. It also means that they are in a position to guarantee the purchase, even if their circumstances change during the buying process.
No long-term mortgage commitments
A cash buyer does not need a mortgage, and so they will not have to find the money for mortgage repayment every month for years to come.
Rapid purchasing process
Because there are no delays waiting for another property to sell, and no hold ups waiting for mortgage approval, buying a house with cash is a swift and simple process. This puts cash buyers in a very strong negotiating position, and they will usually expect a significant discount.
Debt-free home ownership
Owning a home without the debt of a mortgage gives cash buyers a strong sense of financial freedom. They will not have the debt of a mortgage, and they are not at risk of losing their home if they fail to keep up their mortgage repayments.
Chance to decrease stress in the buying process
Once again, buying a house with cash removes a lot of the stumbling blocks that often derail a house sale, such as mortgage issues, problems selling a current property, survey issues and more. A cash home buyer is the least stressful and most secure option if you are selling your home, which is why many people choose cash house buying companies.
Opportunity to buy non-mortgageable property
Cash buyers can buy any house that they want, regardless of the condition. This includes homes that are non-mortgageable due to problems like subsidence. Buying a house with cash means they can snap up a bargain and fix the problem themselves.
Greater flexibility for exchange and completion
Buying a house with cash means the buyer can work to the seller’s timetable, completing when it suits them, rather than trying to choreograph a whole chain of buyers and sellers. This greatly increases the level of flexibility and makes cash buyers a very attractive proposition. Cash house buying companies will arrange completion on any date that suits you.
Stronger negotiating position
As discussed, buying a house with cash puts buyers in a much stronger negotiating position. Many sellers will be prepared to accept a lower price in exchange for a fast, hassle free, guaranteed house sale, on a date that suits them. This is exactly how the cash house buying industry works, and PSW has identified the best cash house buyers in the UK.
How long can it take to buy a house in cash versus a mortgage?
Buying a house with cash can take as little as two weeks and sometimes even less, whereas buying a house with a mortgage will usually take several months or more.
Buying a house with cash is much faster than buying a house with a mortgage because it skips all the delays involved in arranging finance and getting approval for the property. How fast things move after that depends on how much risk buyers are prepared to take.
A cautious cash house buyer will still undertake all the same searches and surveys that you would when buying with a mortgage, and so the process is not much quicker. However, if a cash buyer is prepared to take a risk on a property and bypass the searches and surveys, or can accurately assess the property without waiting for professionals, then they can complete the sale much faster.
Conclusion
Can you buy a house with cash, can you buy a house without a mortgage, or can you find a cash house buyer for your own property? If so then you can expect a significant discount on the asking price in exchange for a faster, smoother property sale.
Cash buyers can offer greater flexibility, more certainty and are in a position to buy a much wider range of houses in any condition. This makes people buying a house with cash in the UK the best option for many home sellers.
Expert Insight from Kelvin Elliott
Kelvin Elliott, founder and buying director of myhomebuyers.co.uk explains the benefits of buying a house with cash in the UK.
“As many as one in three house sales fall through due to problems with the buyers. Mortgage issues, slow chains and survey problems can all slow down the process and put the sale at risk. Buying with cash puts the buyer in a strong position to guarantee a fast, flexible, hassle free house sale, completed at a time to suit the seller. This is why cash house buying companies, like those reviewed on the Property Sale Watchdog, are a popular option if you want, or need, to sell your house fast.”
Can I buy a house with cash?
Yes, you can buy a house with cash or sell your house to a cash buyer in exactly the same way as you would any other property sale. There are no restrictions on buying or selling properties for cash.
Can I buy a house without a mortgage?
You do not need a mortgage to buy a house, and you don’t need a buyer with a mortgage if you are selling. Cash house buyers avoid the delays of mortgage applications as well as removing the risk that the mortgage falls through before the sale completes.
Will I get a better price buying with cash?
Cash buyers are in a much stronger position, offering a fast, certain sale without any risks or hold ups, and so they can usually get a better deal on the property. If you are buying a house with cash, this means you will pay less.
Will I get a lower price selling for cash?
If you are selling a house for cash, you may get a lower price for it in exchange for a fast, certain sale on a date that suits you. You are paying for a service and so you will get less for your home.
Who benefits most from a cash sale?
If you choose a trustworthy cash house buyer then the deal should be of equal benefit to both parties. The cash buyer gets a better deal on the home they are buying, while the seller gets a faster, smoother sale on their own terms.
Is a cash sale always worth it?
A cash sale is only worth it if it benefits both sides. If you are not getting a discount for buying with cash, or you are not getting a faster, simpler sale by selling for cash, then the deal is not balanced. Many cash house buying companies try to keep all the benefits for themselves and give the sellers as little as possible in return. That’s why you should choose a cash house buying company carefully to avoid the scams.ou stand.