Some properties are advertised as ‘cash buyers only’ this could be because the property has underlying issues such as subsidence or Japanese knotweed that prevents it from being mortgageable. In this case, the buyer will need to provide evidence that their funds are from a legitimate source for Anti Money Laundering purposes.
No Mortgage Required
A cash buyer is exactly what you would think, a person who has the funds to purchase a property without needing to secure a mortgage. This means that they can move through the process much more quickly than a buyer who is relying on a mortgage provider, and that may be an attractive factor for some sellers looking for a quick sale.
As a cash buyer, you will also save money as you won’t be paying interest on the funds you are borrowing from your lender Facebook. This can make a difference of thousands of pounds when purchasing a property and can really add up over time.
Another benefit of selling to a cash buyer is that the transaction is less likely to fall through. This is because a cash buyer will typically not be part of a property chain and can move forward with the purchase once they have exchanged contracts.
As a seller, this can be very frustrating when the sale is held up by something as simple as not being able to complete on a mortgage due to financial circumstances or a survey flagging up issues. When you sell to a cash buyer you can be confident that the transaction is as smooth as possible and won’t fall through. However, it is important to note that you will still need to undergo the same checks as a buyer who is taking out a mortgage. This includes the solicitor carrying out Anti Money Laundering checks on the funds you are bringing into the transaction.
No Deposit Required
Cash buyers are able to bypass the mortgage application process and often don’t need to wait for property searches to come back, which can speed up the buying process. This means that a buyer can complete on their new property within weeks rather than months, which can be beneficial for sellers who want to sell quickly.
If you’re buying a home with cash, you will need to provide proof of funds from your bank or savings account (don’t try to use money under the mattress!) Estate agents will typically check this as part of their duty of care and due diligence – they are likely to ask for several recent statements. This will also help to comply with laws that aim to reduce criminal activity and money laundering.
If you’re selling your property to a cash buyer, then you’ll still need to follow the same conveyancing process as any other seller and ensure that you have a solicitor or conveyancer that you trust. They will undertake the same checks that a mortgage lender would, including a Local Area Search, a Regulated Drainage and Water Search and a Land Registry Title Plan. They will then take the legal steps required to complete on the sale including preparing a draft transfer deed and completion statement, sending stamp duty to HMRC and registering your new purchase at the Land Registry.
Less Chance of Falling Through
One of the main reasons that buyers prefer to buy a property with cash is that they do not have to go through the lengthy process of applying for a mortgage. This can be a worrying time for both the buyer and seller, as there is always the risk that the mortgage application will be rejected. However, a cash buyer does not have this worry as they are purchasing the property with their own funds or a cash gift from a family member.
This also means that the sales process is much faster as there is no need to wait for the mortgage application to be approved. This can be especially helpful for sellers who are in a rush to complete the sale of their property.
It should be noted that even though a cash buyer is buying the property without a mortgage, they still need to carry out the same searches that a lender would typically carry out. This includes a Local Area Search, a Regulated Drainage and Water Search and a Land Registry Title Plan.
Some estate agents will ask to see proof that the cash buyer has the funds to purchase your property, as a safeguard against scammers and fraudsters. However, this is not a necessity as the vast majority of genuine cash buyers will be able to provide the proof that they are free to purchase your property.
More Choice of Properties
If you are a cash buyer, you can often buy properties that aren’t advertised on the open market. This is because sellers know that you are in a position to buy their property without the need for a mortgage, so may prefer to work with you on price and terms. You might also find that you can purchase a property at auction or through private sales.
One of the most significant advantages of being a cash buyer is that you can move much more quickly than if you were buying with a mortgage. This is because the sale won’t be held up by the need to obtain a mortgage agreement or by chain breakdown. This is something that many homeowners struggle with and can often lead to lengthy delays in the home-buying process.
Moreover, many property sellers will only sell to cash buyers. This is because they want to ensure that their sale is as quick and straightforward as possible. This is especially important if they are under pressure to move due to work or family circumstances.
However, when it comes to selling to cash buyers, it’s essential that your solicitor or conveyancer checks that the source of your funds is from a legitimate source in order to comply with Anti-Money Laundering regulations. They will also need to check that you are not buying the property as a result of any criminal activity.