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Cash Property Buyers Explained
If you're looking to sell a home in the UK, chances are you've spotted an advertisement for cash property buyers. Perhaps you received a flyer, saw a poster on your local bus stop or viewed an advert online; but what do house buyers do and is it safe to sell your home to an agency? We examine the cash property market and discover more about house buying in the UK.
Reasons To Sell
Homeowners have a myriad of reasons for selling their houses, but unfortunately not all reasons stem from positive circumstances. For instance, what happens to a family home when divorce proceedings require the value to be split between two parties? Another unfortunate house sale situation arises from bankruptcy claims or mortgage foreclosure, sadly a common occurrence in situation where monthly payments have not been met. It is these less preferable scenarios that often lead desperate homeowners to consider the services of house buyers and cash property agents over traditional sale procedures.
Even selling a home for simple reasons such as the desire to upgrade, or relocation due to a new job can be tricky and some owners turn to cash buyers in order to get a quick sale and reduce the hassle and stress associated with selling a house on the open market.
Private Cash Buyers
Selling to a private house buying agency or property company is not the only way to elicit a cash sale for your home; there are private cash buyers that pursue houses on the open market. For example, many first-time buyers are cash buyers, having saved up the funds required for a small home while living in rented accommodation. Some first-time property buyers may also have inherited funds or are entering into a joint purchase with a partner of family member, allowing them to fork out the full asking price upfront. For more expensive houses further up the property ladder, cash buyers still exist but become increasingly rare. Some property investors that require new houses for rental portfolios or renovation investment projects may have sufficient funding available for cash purchases. However, it is more common for even wealthy house buyers to seek mortgage and finance arrangements in order to leave liquid funds for other purposes such as stock or bond investments. With concerns over money laundering and tax avoidance, many estate agents and solicitors make it difficult for genuine cash house buyers to make purchases and it is no longer sufficient as a potential buyer to prove they have the money in their bank accounts - agents want to know how it got there.
The Property Chain
More often than not, the buyers you will find for your house will be stuck in a situation that requires them to sell their own properties before they can buy yours. This is called a 'housing chain' and can lead to major delays when closing property deals, some even spanning years. Property chains can have many links and the more expensive your home is, the more people you are likely to have lower down in the chain causing delays. With only a few private cash buyers speeding up the process, some turn to cash buying agencies to intervene and make a quick sale, despite this often resulting in a lower end sale price.
Cash Buyer Valuations
How much can you expect to achieve for the sale of your home if you sell to a cash property buyer? The short answer is: less than market value. The long answer is more complex; consider for a moment how much it costs to sell a home. Firstly, you have estate agent fees, then there are additional advertising costs if you want anything other than a tiny text ad in the local paper. Add on the mortgage fees while you wait to sell and all the time off work you need to facilitate viewings and oversee extra repair work. The end figure is well into the thousands, and continues to rise the longer your house is stagnant on the market. Some figures suggest that cash property buyers may only offer 70% of your home's value or less. While this initially seems like a very low offer, when coupled with the speed of the sale it becomes much more reasonable.
Finding A Cash House Buyer
Once you've made the decision to sell quickly to a house buyer, it is not hard to find one in your local area. Most will advertise in local and regional newspapers and directories such as the Yellow Pages. A simple Google search for "house buyer" and your city or county will quickly bring up a list of cash property buying companies. Don't be taken in by any grand marketing statements plastered on a website's homepage; always take the time to read small print several times and consult with a property solicitor before committing yourself to a sale. By being sensible and prepared, the sale of your home can be quick and easy and beneficial to all.
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