Everything You Need To Know:​

Why signing a contract with a cash home buyer is never a good idea (2024)

Start Here

The title of this piece tells you all you need to know on this important aspect of quick cash home sales. So let there be no doubt whatsoever on this point. You should never be talked into signing a contract with a cash home buyer. And when we say never, we mean never. No ifs, no buts. There should be no contracts with a cash home buyer under any circumstances, whatever they may tell you, whatever they may try and tempt you with.

You might think that signing a contract with a cash home buyer is standard procedure. Certainly, many of them would like you to think that. However, signing a contract with a cash home buyer is something you should avoid at all costs. These contracts never benefit you; they simply bind you to the company, tying you down while leaving them free to do as they please.

Table of Contents

Want to hear why we think signing a contract with a cash home buyer is never a good idea?

We have independently investigated all the best cash home buyers in the UK.

We ranked them based on their cash offers, reliability, customer service and 15 more metrics.

And we discovered that ‘My Homebuyers’ are superior in every regard to all other companies.

My Homebuyers will give you the best genuine cash offer, without contracts and without any fees.

While other companies will try to lock you into a contract which is rarely in your benefit. Even if they claim they don’t have contracts, the truth is, they do. And they’ll force you to sign it.

Click the button below to see exactly why we recommend My Homebuyers as your best option.

And how you can use the free Safe Connect™ programme to get VIP treatment from them.

In this article, we’ll look at why you should never sign a contract with a cash home buyer. We’ll explain why this is a very bad idea and how it could end up costing you both time and money. Plus, we’ll show you why a reputable buyer will never ask you to sign anything except the paperwork for the sale itself.

1. Don’t be casual with contracts

When it comes to signing contracts, most of us are frighteningly casual about it. Be honest, have you ever read the details of your mobile phone contract, or studied the Netflix terms and conditions? We all sign contracts and agree to terms and conditions all the time, but we rarely bother to actually read them. You could be signing your life away, and you simply wouldn’t know it.

A recent news story amusingly proves this point. A company called Tax Policy Associates amended their terms and conditions to read:

“This website uses cookies, so it remembers your name if you leave a comment. You can reject them if you like. We will send a bottle of good wine to the first person who reads this.”

The ‘free wine’ offer was made in February, but it took until May for someone to bother reading the contract and claim the prize. 

Not reading a contract in detail is fine when you are dealing with a trusted company like a broadband supplier or your TV streaming service. However, when it comes to the shady world of cash home sales, you need to be at your absolute sharpest and not sign anything unless you are 100% sure about who you are dealing with. And with these companies, you can never be completely sure of their motivations, especially when they are insisting that you sign a contract.

2. Who does a contract benefit?

If you are in any doubt as to whether or not signing a contract with a cash home buyer is a smart move, simply ask yourself who the contract is designed to benefit. No cash home buyer is going to create a contract that benefits you at their expense. These contracts are always designed the other way around, giving them all the benefits.

Bear in mind that dodgy home buying companies are not here to provide you with a service and look after your needs. They don’t care about ethics, customer care or even their reputation. They are simply there to make as much profit as possible, and they don’t care who they rip off along the way to make it. Getting you to sign a contract lets them get away with whatever they want. You’ve agreed to let them dictate the terms in their favour, so why wouldn’t they take full advantage of that?

3. Why would your buyer need a contract?

You have to ask yourself why a cash home buyer would need a contract in the first place. After all, if their offer is honest, and their service is as good as they say it is, then they shouldn’t need to tie you in. You should want to stay with them of your own volition.

If you are selling on the open market, through an estate agent, you wouldn’t expect a potential buyer to come armed with a binding contract. In a fair and open market, it is up to your buyer to prove themselves to be your best option for a home sale by making you the most generous offer, proving they have the funds to buy and acting fast to complete the sale. 

The same is true when it comes to a quick cash home sale. It is up to the cash buyer to prove that they are the right choice for you. They shouldn’t have to force you to sign a contract to keep your business. If they are everything they claim to be, then you’ll do business with them because you want to, not because you have to.

Want to hear why we recommend My Homebuyers above everyone else?

We ranked them based on their cash offers, reliability, customer service and 15 more metrics. And we discovered that ‘My Homebuyers’ are superior in every regard to all other companies.

My Homebuyers will give you the best genuine cash offer, without any fees and they will never ask you to sign a contract.

Click the button below to see exactly why we recommend My Homebuyers as your best option and how you can use the free Safe Connect™ programme to get VIP treatment from them.

4. Tempting offers to trap you

Given how obviously bogus signing a contract with a cash home buyer clearly is, you might wonder why anyone ever signs one. Unfortunately, may people are lured into signing a contract with a cash home buyer by a tempting offer, and they get trapped before they know what is happening.

This kind of contract trap is baited with what appears, on the surface, to be a generous cash offer. The cash home buyer will make an incredible offer that beats the rest of the cash home buying market, but only on the condition that you sign a contract there and then. 

They won’t give you time to consider the contract (or to look for the free wine offer!) They will insist that you sign as soon as possible, to secure your generous deal. This rush is to avoid the risk of you getting independent legal advice that will tell you that signing a contract with a cash home buyer is the last thing you should do.

They will tell you that you need to sign the contract to ‘lock-in’ your incredible deal, and that without it, you could lose out. In fact, it’s the other way around. If the deal changes and you haven’t signed a contract, you can simply walk away. However, if you are locked in by a contract, you will have few options. 

To make matters worse, these companies will usually save their significantly reduced offer until the very last minute, sometimes even the day you were hoping to exchange on the deal. By this point, most people are fully committed to a move and way beyond being able to change their mind, even if their contract allowed you to do so.

5. What’s to stop you from breaking a contract?

If you do get conned into signing a contract with a cash home buyer, chances are there will be a penalty clause. This means that if you break the contract, for example if you sell to someone else, you change your mind or you get frustrated with how long the transaction is taking, then you have to pay your buyer a fee. These companies will justify this by saying that this fee covers their costs, such as surveys, valuations and legal work.

Once again, you wouldn’t expect a buyer on the open market to charge you for their costs in assessing your home. You are the seller, and it is up to them to decide if they want to buy or not. You shouldn’t have to pay towards the cost of buying your home.

It is worth remembering that at the end of the day, even if you have fallen for signing a contract with a cash home buyer, there is nothing stopping you from breaking that contract. You should never feel forced to go ahead with a sale or a price that you are not happy with. Even if you do have to pay a penalty, this will usually involve less of a loss than accepting a substantially lower offer for your home. It may be painful to pay it, and distressing to lose the sale and have to start again, but it won’t be nearly as expensive as agreeing to a rip off deal. Whatever they tell you, the choice is still yours whether to sell your home or not.

6. Penalties and charges on your deeds?

If you have had the wool pulled over your eyes and have somehow ended up signing a contract with a cash home buyer, then the penalty clause is usually somewhere around £1000. That means that if you don’t sell after signing a contract with a cash home buyer, then you have to pay them £1000.

You might think that you can walk away without paying this fee in the hope that the company won’t chase you for it. But you can be absolutely sure that they will. 

If you don’t pay what they cash home buyer claims you owe them for breach of contract, then they can attach what is called a charge on your deeds. This will prevent you from selling your home until the charge has been satisfied.

7. Contracts with no fee if the price is reduced

Sometimes, the contract penalty fee will appear to work in your favour. Your cash home buyer will say that if they reduce their price, then you can walk away without having to pay a fee. This may seem fair at first, but think about it…

This kind of contract pretty much admits that the company is going to reduce their offer at some point. Unfortunately, as discussed above, this will usually be at the very last minute when it is too late to pull out of the deal. Saying you can walk away without paying a fee, and you actually being able to do so, are two entirely different things.

There are two main types of cash home buyer contracts to look out for: Tie Ins and Option Agreements.

Tie-in contracts

Tie in contracts with a cash home buyer do exactly that. They tie you in with the company for a set period of time. This means that however bad their service and however slow they are progressing with your sale, you can’t walk away without paying a penalty fee.

By signing a contract with a cash home buyer, you are giving them licence to work as slowly as they like. There is no incentive for them to complete the quick sale you are hoping for, and paying for, because you are tied-in to the contract whether they buy your home quickly or not. Inevitably, they will focus their energies on finding new customers once they have secured your business with a contract, rather than working hard to retain your trust.

Once you have signed a contract, you will probably find that things go rather quiet from your cash home buyer. All that initial enthusiasm for buying your home will fade, because by talking you into signing a contract, their work is done. 

Some companies make most of their money from contract violation fees alone, with no intention of ever buying your house. They just get you roped in buy signing a contract with a cash home buyer, then they behave really badly until you feel you have no choice but to pull out and pay the penalty just to be free of them. It’s easy money with no effort on their part whatsoever.

A genuine cash home buyer with no contract has to stay on their toes to keep your business, and so they will pull out all the stops to make your sale happen.

Option Agreements

The other kind of contract to be on the lookout for is called an option agreement. Look closely at the details and you’ll see that this is not actually a contract to buy your home at all. It is simply an agreement that allows your so-called buyer to sell your home behind the scenes for more money and pocket the difference. They will tell you that they are buying it themselves, but in fact they are simply brokering a deal with a third party.
This has a all the drawbacks of a traditional sale on the open market, without any of the benefits of the swift sale you were counting on. They will take time to find a buyer, who will then take time to complete the sale, and since as many as a third of home sales fall through, there will always be a risk that the sale will fail.
At the end of the day, with an option agreement you are getting a sale that is no faster than selling the traditional way, often taking many months to complete, but you’ll get far less for your home. Selling with an estate agent will cost you 1% – 2%. Selling via an option agreement could cost you 20% or more, yet you will not sell any faster or with any greater guarantee of success.
Unfortunately, these option agreements are often buried deep in the small print and can be hard to spot if you don’t know what you are looking for. This is why these companies will rush you to sign the contract, to reduce the chances of you reading the contract and spotting the con.
A genuine cash home buyer will always have funds available to buy your home for cash and should be able to prove this if you ask them. It’s not an unreasonable question, and you should not be afraid to ask. No legitimate home buyer will be offended, and they will be happy to show you they are the real deal with money in the bank.
Genuine cash buyers will not need to find a buyer to sell on to in order to complete the purchase. They will buy your home first, in a separate transaction, and then look for a buyer to sell it on to at a later date. This future sale will not have any impact on your sale to the cash buyer, and it will not slow down the transaction or carry any risks of a failed sale.

7. What to do if you’re asked to sign a contract

The simple answer is don’t. Don’t sign a contract under any circumstances whatsoever. If you are asked to sign anything before the formal conveyancing process, you should politely decline. If your offer price is conditional on you signing a contract with a cash home buyer, then you should walk away. 

It can be very tempting to get a great offer for your home, and to fall for all the empty promises that come with it. These offers can be thousands of pounds, or even tens of thousands higher than you’ve been offered elsewhere. But remember, if something seems too good to be true, chances are it is. A genuine offer may be a little lower than the contract con-artists, but you have a far greater chance of actually getting that price when the sale is completed. 

There is simply no place for contracts in a reputable cash home buying industry. They should go straight in the bin along with the unrealistic offer from the company that sent it to you. 

8. How the cash house buying process should work

When you choose a reputable cash home buyer, the process is much simpler. There are no contracts to sign, no tie-ins and no dodgy deals involving third parties. Your cash home buyer will make you an estimated offer based on the details of your home. 

A genuine cash home buyer should be able to demonstrate proof of funds, to show they are buying your home themselves. They should also be happy to put you in touch with previous customers, who will tell you what they are like to do business with and whether they stick to the price they offer.

You should always take the time to talk to these people, as online reviews can easily be faked to make a company sound good. Genuinely happy customers can’t be faked and will give you real insight into who you are dealing with.

The cash buyer will then confirm their price after they have assessed your home in more detail. If you accept this offer, then the sale will go ahead, often in as little as a few weeks. If you don’t like the price, or you have any doubts about the company, you can pull out of the deal at any time, without paying a penny. 

Remember, no genuine cash house buyer will ever ask you to sign a contract. However good they appear to be, however slick their website, getting talked into signing a contract with a cash home buyer is always a major red flag. There is simply no reason for it other than to weight the deal in their favour.


The simple takeaway from this article is that you should never be talked into signing a contract with a cash home buyer. If you do sign a contract:

The buyer is the only one who will benefit

  • You could be tied-in for many months with no way out
  • You could face a large financial penalty if you pull out
  • They could place a charge on your property if you fail to pay this fee
  • You could give them the right to sell your home without actually buying it first
  • You could end up getting less for your home, without selling it any quicker

Reputable companies don’t need contracts to keep their customers. If you are treated fairly, you will want to stay of your own free will, because you are getting a good deal and a high quality of service.

Find a contract-free cash home buyer

With the huge number of cash home buyers out there, it really is a sellers’ market when it comes to cut price cash deals. If you don’t like the look of one cash home buyer, or they are insisting that you sign a contract to get their amazing deal, then you can simply walk away and move on to the next one.

Fortunately, the Property Sale Watchdog has done a lot of the leg work for you, by vetting the best of the UK’s cash home buyers to help you make an informed choice. Our guides will always tell you if you will be forced into signing a contract with a cash home buyer, so you can cross them off your shortlist before they have the chance to persuade you that signing with them is a good idea.

Final Thoughts

Selling your home to a cash buyer can bring lots of benefits, especially if you need to sell fast because of your financial circumstances. It can be quick and convenient and deliver a guaranteed sale in as little as three or four weeks. 

However, this does come at a cost. Even the best cash home buyers will only be able to offer you around 80% of the market value of your home (occasionally 85% under very specific circumstances where stamp duty does not apply).

When you’re sacrificing 20% of the value of your property – that’s over £50,000 on the average home in England – you should be the one calling the shots, not the home buying company. The deal should be completed on your terms, not theirs. They’re making enough money out of you and they don’t need to add cash penalties or dodgy third-party deals. 

Don’t forget that you are the one holding all the cards here. You have a property that they want to buy, and they should be working hard to show you that they are the company you should sell to. 


You don't have to do this alone

To understand why going through us is both better and safer, instead of going directly to your home buying company of choice, click the button below.

We want to help out as many people as possible. That’s why we created this comprehensive article. Depending on your preference and circumstances, we’ll connect you for free with one of our strictly vetted, ethical partners.

They will help you sell your property for the best offer you can realistically achieve. They will take care of all of the legal processes and fees and you’ll get the cash straight into your bank account.

With our partners you can achieve a very fast sale or a slower one if you’re not pressed on time. Faster sales usually yield a lesser price but they save you time. It all depends on your circumstances and preference.

Look After Yourself

We hope this article has given you ample guidance on how to avoid getting caught in a contract when it comes to selling your home to a cash home buyer. 

We aim to arm you with as much knowledge as possible so that you feel better prepared for any eventuality. 

Remember – your financial health is important, but mental health must always come first. 

Wherever you are in the process, make sure you talk to people regularly, whether it’s friends, family, trusted co-workers, or helpful agencies. 

Taking time away from dealing with phone calls and paperwork is crucial for clearing your mind, and keeping your sanity in tough times. 

Share This Post

More To Explore

The Definitive Guide:

How to Stop Your House From Being Repossessed


All-inclusive Guide:

Selling a Property After the Death of Parents