Buying a house for cash - Pro’s & con’s
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We live in a world of convenience. Small comforts and luxuries have become the norm in a modern lifestyle – we can now answer our front door, control the temperature of our homes and boil the kettle without having to leave our sofa.
Consumers globally show an increasing demand for convenient solutions that can help to simplify their lives.
And why not?
Considered to be one of most stressful events in modern life, buying or selling property has been made easy work in recent years with companies that offer to handle the whole process for you.
In this article we explore the pros and cons of cash transactions within the property market.
Here we will discuss the property buying transaction when using cash in an upfront and completely transparent way, from both a BUYERS and SELLERS point of view.
Let’s have a real look at both sides of the coin…
Buying a house outright with cash from a SELLERS point of view:
Pros
1. The sale is almost guaranteed to go ahead
As a result, accepting a cash offer can considerably reduce the amount of stress of the financial transaction.
2. No chain
Eliminating the need to rely on other parties in the chain to stick to timescales or worse, pull out of the transaction completely.
3. Fast process
The Cash Buying process takes around 2- 3 weeks on average, compared with potentially months on the open Market.
4. The process is usually taken care of for you
You will not need to go through the hassle of chasing people and trying to figure out what your solicitors are doing.
5. External / Environmental factors
Many factors will not affect the sale as much as a traditional mortgage purchase, as companies have more resources to utilise.
6. You do not need to rely on banks or mortgage lenders
Banks and mortgage lenders often pull out or reject purchases for a number of reasons. Using a cash buyer eliminates this risk.
7. No need to carry out those essential repairs
You will not have viewers inspecting your home, so no need to roll up those sleeves!
Cons
1. Cash offers are often less
Cash offers are often slightly below asking price. This has been true since the beginning of time.
People who use a cash buyer willingly make a trade off - often sellers decide they are in a position where the most important factor is to receive a much faster service, where cash buyers are the perfect option.
Buying a house outright with cash from a BUYERS point of view:
Pros
1. The sale is almost guaranteed to go ahead
As a result, accepting a cash offer can considerably reduce the amount of stress of the financial transaction.
2. No downward chain
Eliminating the need to rely on other parties in the chain to stick to timescales or worse, pull out of the transaction completely.
3. Fast process
The Cash Buying process takes around 2- 3 weeks on average. There is no hassle of trying to secure a mortgages which can be time consuming at best.
4. You’re appealing to sellers
As a cash buyer, you’re more appealing to sellers than those buying with the help of a mortgage.
5. It saves you money
As you won’t be paying interest on a large loan, in the long term you’ll pay less money for the property. You’re also eliminating the fees associated with the mortgage process.
6. There is more security in the long run
As a cash buyer, you own the property from the start.
If you fall into financial difficulty further down the line you won’t need to worry about getting behind on mortgages and, no matter how bad things get, you’ll always have a roof over your head until you decide to sell it.
Cons
1. The buyer is always the risk taker
This is true in any transaction. Property cash buyers often pay less for a property because they have the time to sell on the open market for a slight profit.
However, if the property was struggling to sell in the first instance, the buyer risks being stuck with a property they cannot move along.
2. Loss of liquidity
It’s a huge amount of money to be spending. Make sure you’ve properly budgeted so you’re sure you can afford it alongside your living costs.
3. Lack of flexibility
Even if you have the cash, it might not be beneficial to have so much of your wealth tied into one purchase as it could limit your options further down the road.
It might also make it trickier when you do go on to sell, as you’ll need to make sure you’ve still got enough money to pay for the deposit on your next place.
4. Lack of checks
Whilst the mortgage lender’s surveys and checks may seem time consuming and expensive, going without them can put you in a risky position.
Who might benefit from using a cash buyer?
TPBC offer specialist advice to people who may want to buy or sell property under one of the following circumstances:
Uncertain market conditions
Meeting a deadline for an onward purchase
Relocating (in UK)
Empty property to sell
Financial difficulty
Emigrating
Buying or selling an un-mortgageable property
Looking for a speedy completion
Who qualifies as a cash buyer?
A cash house buyer is someone who has cash funds ready at the time of offer and is able to buy a property outright quickly without requiring a mortgage or selling another property first.
We are the UKs leading property solutions company, they are an approved and regulated cash buyer, meaning you will receive professional advice, guidance and peace of mind from enquiry to completion.
Our easy process for buying a house with cash:
Visit our "Get An Offer" page and pop your postcode in
You’ll receive an email with an estimate valuation based on searches within your area
We’ll call you to find out more about your property and whether you’re happy to proceed
We’ll then book in a home visit from one of our Acquisition Managers who will look at your home, make note of any unique features or potential problems and chat to you about your situation and reason for selling
If you’re happy with the final valuation then we’ll commission a RICS survey to be completed by a professional
You’ll receive a cash sum in your bank account within a matter of weeks
Karl McArdle, joint CEO of The Property Buying Company
Karl gives us some insight into who in particular we can offer help to during a property transaction.
“I have worked in the property industry for many years. One of the reasons I am so passionate about TPBC and the services we offer is that it does not discriminate."
"Not only do we help people who are looking for an easy transaction and convenience, but there are also those who simply would not be able to go through this process on their own. My team are amazing, they give the highest level of customer service to those who need it most.
“We make our process completely transparent and our advisors openly discuss the Pro’s and Cons with our customers and will answer any questions openly and honestly."
"I believe this is the best way of doing business with anyone. The buyer is always the risk taker in any transaction, and we are taking a risk on every single property we purchase."
“We know that people are busy and their time is precious to them, but we exist because of this. My job is to ensure both parties in our transactions are achieving a decent result. That is what a good business is all about.”
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