Do cash buyers offer less

When selling your home, you’re likely aiming to secure the best deal in the shortest possible time. You may have come across buyers who describe themselves as cash house buyers, offering a quicker sale. 

But does choosing a cash buyer guarantee the best price, or do they tend to offer less for your home?

To help you decide if selling to a cash buyer is the right move, we’ve put together a detailed guide. In it, we discuss the advantages of selling for cash, whether cash buyers offer less than market value, and much more to help you make the most informed decision.

Key takeaways

• While cash house buyers offer below market value, the reduced price compensates for the speed, security and convenience of a cash sale.

• Certain property issues, such as structural damage, or a short lease, makes home unsuitable for traditional buyers but ideal for cash buyers.

• The Property Buying Company is a leading UK cash house buyer, who helped over 2,000 people move house over the past 13 years.

What is a cash house buyer?

A cash house buyer is someone who has the funds to buy a house outright, without the need to sell their home or get any kind of loan. You can find cash house buyers when you put your home up for sale on the open market, or you may come across a cash house buying company, like ourselves.

With a cash buyer, there are fewer obstacles in the sale, as there is no chain and therefore less paperwork. You can also find some cash house buyers don’t tend to bother with having a survey on the property they’re buying, which tends to make the conveyancing process faster.

Cash house buyers tend to be more desirable to a seller due to the faster nature of the process and the fact there is no chain with a cash buyer, making them feel to be a more reliable buyer.

We’re a specialist cash house buyer with our own cash reserves, meaning we’re able to buy any property in any condition, no matter the price. We’re also a member of The Property Ombudsman and the National Association of Property Buyers, showing we’re a cash buyer you can trust.

Do cash house buyers offer less?

Yes, cash house buyers usually offer less for your home compared to traditional buyers, but this doesn’t mean you are losing out on significant profit. The reduced offer compensates for the speed, security and convenience of a cash sale. With cash buyers, you avoid the costs associated with estate agent fees, legal fees and the risk of the sale falling through due to buyer financing issues.

For example, based on the average UK house price of £280,000, here’s a breakdown of how much  a cash buyer might offer and how much you will receive for a 7 day house sale:

Why would someone want to sell their house for less?

There are many different reasons why a seller may look specifically for a cash buyer for their home. After all, it’s much faster, there’s less paperwork and it allows sellers to avoid a chain - just to name a few reasons. 

Below are more examples of why someone may want to sell their house to a cash house buyer:

How much Below Market Value do house buying companies offer?

House buying companies offer a fast and convenient way to sell your house, but how much less than market value can you expect? Simply put, these companies will never pay full market value because they need to make a profit and cover their own expenses. If they were to offer market value for every property, they wouldn’t be able to sustain their business model.

While many house buying companies consider market value when making offers, the final price will always reflect their need to account for costs and risks. They will base their offer on several factors, including the current market value of your home, local market trends, and any structural or other issues that could impact your home’s worth.

Typically, a well-funded and reputable house buying company will offer around 15% below market value. In some cases, particularly if the property has significant issues, the offer may be as much as 20% to 25% below market value. This reduction allows the company to cover expenses while still providing a competitive offer.

How much less do cash buyers pay for houses?

Cash buyers generally offer 20% to 25% less than the market value of your home. While this might initially seem like a significant reduction, cash buyers bring several advantages that can outweigh the downside of a lower offer.

For instance, cash buyers can complete the purchase much faster since they don’t rely on mortgages or loans. Some companies, like The Property Buying Company, can complete your house sale in as little as 7 days  – a speed that’s impossible to achieve on the open market.

Additionally, many cash house buying companies cover all costs, including legal fees which means the offer you receive is the exact amount you’ll walk away with. On the open market, even if you sell for 5% to 10% below market value, solicitor fees and estate agent commissions could leave you with less money than a cash buyer would offer — while also costing you time.

Another key advantage of selling to a cash buyer is the reduced risk of the sale falling through. Cash buyers are chain-free and companies like The Property Buying Company guarantee the sale once an offer is accepted, providing peace of mind that the process will go smoothly.

Selling to a cash house buying company not only ensures a quicker, more secure sale but also eliminates much of the stress associated with the traditional market, as they manage the entire process from start to finish.

Do cash buyers get better deals on homes?

Yes, cash buyers often get better deals on homes, but not always in the form of a dramatically lower price. Cash buyers usually offer below the asking price or market value of a property, a practice which is often referred to as the ‘cash buyer discount.’ However, this offer comes with significant benefits for sellers, which can make it an attractive option.

Many sellers see the slightly lower cash offer as a worthwhile trade off for the faster, more secure sale that cash buyers provide. Here are a few key reasons why cash buyers might get a better deal, and why sellers are often happy to accept these offers:

Fast house sale

• Cash buyers are able to complete a sale much faster than traditional buyers because they aren’t waiting for mortgage approvals or dealing with the complexities of property chains. They already have the funds available, which means they can often complete the deal in as little as 7 days.

• This speed is appealing to sellers who need to move quickly due to job relocation, inheritance or even to stop repossession. In a market where open market house sales can take four to six months to complete, the ability to sell fast is a major advantage.

Chain free sale

• One of the biggest advantages cash buyers offer is a chain free sale. Traditional buyers are often part of a complex chain, where the sale of one home depends on the sale of another. If any part of that chain breaks, the entire process can fall apart. Cash buyers eliminate this risk, providing a more streamlined and reliable transaction.

Sale security

• Cash buyers are generally more secure because they don’t rely on external financing. They don’t have to worry about mortgage approvals or changes in financial circumstances, which means they are far less likely to back out of the sale.

• When a cash buyer makes an offer, it’s usually because they are serious and ready to proceed. This reduces the risk of the sale falling through, which is a common concern in traditional transactions.

Cost savings for the seller

• In addition to offering speed and scrutiny, cash buyers can save sellers money. By selling to a cash buyer, sellers can avoid estate agent fees, reduce the risk of paying for unnecessary surveys, and may not have to cover legal fees, as many cash buyers, such as The Property Buying Company, cover these costs. 

• While the cash offer may be below market value, these savings can make up for it, making the final deal more competitive and attractive than it seems at first glance.

Simplified conveyancing process

• Selling to a cash buyer also simplifies the conveyancing process, which is usually faster and less complicated. Without the involvement of a mortgage lender, there are fewer legal and financial checks, making the transaction smoother. For sellers who have experienced delays or failed sales due to mortgage issues in the past, this simplicity can be a major selling point.

Are cash buyers honest?

Regulated cash house buying companies are required to be honest and transparent, as they must adhere to the code of conduct set by the National Association of Property Buyers and The Property Ombudsman. These organisations enforce strict guidelines, and companies that fail to comply risk losing their membership and damaging their reputation.

If you encounter dishonesty from a regulated cash buyer, you have the right to file a complaint through their redress scheme, ensuring accountability and protection for sellers.

However, it’s important to note that not all cash buyers are regulated. If you are selling on the open market and the buyer claims to be a cash buyer, they are not bound by the same rules and could be potentially less transparent.

Additionally, some cash house buying companies operate outside of the regulated framework, meaning they may not follow the same ethical standards as The Property Buying Company.

How much less should you offer on a house when paying cash?

As a cash buyer on the open market, you’re in a strong position to negotiate. Typically, you can offer around 10% to 15% below the market value of the property. 

This cash buyer discount reflects the benefits you bring to the seller, such as the speed of the transaction and the certainty of not relying on mortgage approvals. This reduced offer also helps offset your costs, like Stamp Duty, while still being attractive to the seller.

However, it’s worth noting that professional cash buying companies often offer even lower prices, as they also act as the estate agent and cover all the fees. When selling to an individual cash buyer like yourself, the seller may still need to pay estate agency fees, which may limit how much of a discount they’re willing to accept (unless you do cover them).

Is a cash house buyer better for money?

While a cash buyer usually offers below market value, they can still provide better value for money in many situations. When selling through an estate agent, the process can take six months to a year, and you’ll incur fees for services like marketing, negotiations, and legal support. 

On the other hand, selling to a cash buyer involves a lower sale price, but you avoid estate agent fees and benefit from a much faster transaction, often completing within a few weeks.

Effectively, the “discount” you accept from a cash buyer serves as payment for the speed of the sale. Unlike estate agents, where delays and fall throughs are common, cash buyers offer a full service experience with far less hassle. 

The speed at which cash buyers can complete the sale is something traditional estate agents simply can’t replicate, making cash buyers a more efficient and potentially cost-effective option in the long run.

Should I use a cash house buyer?

When it comes to selling your property, using a cash house buyer can offer significant advantages, particularly in terms of how fast and secure they operate. The phrase “cash is king” holds true in cash buyer transactions. A cash buyer is not reliant on mortgage approvals or bank financing, which often speeds up the process considerably.

In many cases, a freehold house sold to a cash buyer can be completed in as little as a week, sometimes even faster, depending on the cash buyer's readiness and the absence of complications like legal or survey issues.

Choosing a cash buyer also helps eliminate the risk of the sale falling through due to financing issues or not being able to get a mortgage. Since there’s no chain involved, you avoid the delays or collapses associated with the buyer needing to sell their own home first, providing you with peace of mind and needed certainty, especially if you’re working to a tight deadline.

Cash buyers are often professional investors or companies specialising in fast sales, which means they understand the process and are prepared to move forward quickly. Selling your house via a cash buyer like The Property Buying Company means you can sell your house in as little as 7 days, for free, as we cover all your selling costs.

How does a cash for house buying process work?

The cash buying process is much simpler and faster compared to traditional estate agents, especially when you consider that the whole transaction can be completed in as little as 7 days. If you’re looking for a quick and hassle free sale, here is how the cash for house buying process usually works with The Property Buying Company:

Sell your house fast for cash today!

We are the UK’s most rated cash house buyer, committed to protecting our customers at every step of the buying process.

We focus on building strong relationships with our clients and you’ll be assigned a dedicated property consultant who will be your consistent point of contact throughout the entire process. As one of the UK’s best cash buyers, we bring over 13 years of business experience, with our team collectively offering more than 100 years of expertise in the industry.

We know how to buy your house quickly and efficiently, ensuring you are supported at every stage of the journey.

Our consultants are ready to guide you through the process and answer any questions you may have. Simply enter your postcode in the form below, and let’s begin your journey to a smooth, hassle-free sale.