Moving house is the third most stressful thing a person will experience in their lives. The other two, we are told, are divorce and the death of a spouse.
However, those who have moved house will probably tell you that the actual act of moving - the physical transportation of all your worldly possessions from the old house to the new home - is not the most stressful part of the procedure. Most of the stress comes from the uncertainty and risk that the process could fall through, mounting costs and the rigmarole of arranging loans and paperwork.
Some believe the way to avoid most of this stress is to sell a home to a cash buyer. They believe this might eliminate many of the obstacles that cause much of this stress.
What is a cash buyer?
A cash buyer is someone who has sufficient funds to buy a house outright without needing to secure a mortgage or sell something, such as another property.
Whether you are a buyer or seller, there are several reasons why cash transactions can be advantageous.
The sale is less likely to fall through
The buyer will not be looking to arrange a mortgage, which eliminates the worry that they will be unable to raise the necessary funds causing the deal to fall through at the first hurdle. Roughly a third of collapsed sales occurred as a result of the buyer's finances not being in order.
There is no complicated house chain
The buyer will not be part of a chain, so they do not have to wait until someone has bought their property. This means that there is less danger of the deal collapsing at any time during the selling process.
The process can be a lot faster
It generally takes around one month for a buyer to secure a mortgage offer. A cash buyer already has all the funds they need so this waiting period is eliminated.
There is more security
As a cash buyer, you will own the property from day one. If you subsequently fall into financial difficulty, you won't need to worry about getting behind on mortgage payments.
It would be foolish to deny that, in certain circumstances, selling a home to a cash buyer would be a good idea. However, like all things in life, there can be pitfalls in selling for cash.
Cash offers are often less
Cash is king, and many genuine cash buyers believe this gives them the power to demand a discount on the asking price.
Cash sales can still fall through
There is still the possibility that the buyer has a change of heart at the last minute, or the survey may flag up issues that result in them pulling out of the purchase.
Is there something wrong with the property?
Buyers can be put off by properties marketed to "cash only buyers", as this can indicate that the seller suspects that there is something wrong with the property that would be picked up on a mortgage provider's checks.
However, this is not always the case; there are several legitimate reasons why a seller would specifically request a cash buyer. They may need to sell quickly for personal reasons.
Loss of liquidity
It sounds obvious, but you must ensure you still have enough money to cover your day-to-day living expenses as a cash buyer.
Risk of scams
Whilst rare, scammers posing as cash-buyers are out there. The "buyer" will offer you a cashier's cheque but then come up with a lie about why they need you to refund a portion of the funds, for instance, an accidental over-payment. When the cheque is later found to be a forgery, you will still be responsible for the funds you transferred.
The best way to avoid scammers is to use a reputable estate agent.
What is the process for buying a house with cash
The process for buying a house with cash is essentially the same as any property purchase. The obvious difference is that the buyer will not need to arrange a mortgage.
The wise cash buyer will still perform the same checks as a mortgage provider does before lending someone the money for a house. This means that surveys and property searches will still be carried out.
Is there another way to avoid the stress of selling a house?
Yes. Take expert advice. Professional guidance and support can relieve the stress of selling a property, even if it is a cash sale.
Although many cash buyers are genuine buyers looking to buy a new home for themselves and their families, quite a few are companies and investors looking for a quick sale and bargains. Cash is king, and many genuine cash buyers believe this gives them the power to demand a discount on the asking price - a discount which often exceeds what an estate agent will charge.
At Plaza Estates, we are able to act as a go-between for the seller and buyer, forging an agreement that suits both parties, negotiating with the cash buyer on the seller's behalf.
Having a cash buyer can alleviate some of the stress of moving house, but there are many situations which can arise where you may need our help and guidance. Contact us
today and find out how we can help you.