Do Cash Buyers Offer Less?

Selling your home isn’t meant to be easy, is it? The chain breaks, the legalities, the paperwork, the fees. It’s a never-ending run of delays, confusion, and expense. Unless, of course, you choose a cash house buyer. At least that way, you can get a quick sale and have no fear of a sudden chain break. The thing is, the adage of, “if it sounds too good to be true, it probably is” starts to run through your mind.

Can you really bypass the pitfalls of the traditional market and sell your house fast? Can you really have your house sold, no matter its condition, location, or type? Can you really get the price you hoped for?

Well, it’s a mixed bag of answers, for the most part, cash house buyers will do all of that for you. The only potential negative is that you may not get the price you hoped for. Cash house buyers do tend to offer less for a home, but not in all cases. And, when they do, the savings you make elsewhere could actually see you better off.

In this blog, we explain why.

What is a cash house buyer?

A cash house buyer is exactly that. A business or person that buys a house for cash. With no need for a mortgage or a loan of any kind. They can immediately hand over funds for the entire purchase and free a seller from the risks of chain breaks or overvaluations.

With a business model created around a fast and guaranteed property sale, and often of benefit to those trying to sell an unsellable house – think subsidence, mould, fire damage, or flooding history – cash house buyers remove the worry homeowners have when trying to get their home sold.

With the average time to sell a house in England currently around the 80-day mark according to Statista, it can be no wonder people look for a speedier resolution.

How much less do cash buyers pay for houses?

Between cash house buyers who operate as a business and those who purchase as individuals, the amount offered for a house can vary. In most cases, a cash buyer will offer less than the market value or asking price. This can range from 10%-25% of the asking price but much will depend on the condition of the property and its age. The older and less looked after the home, the less you are likely to be offered for it.

This though, is the same as the traditional estate agent to an extent. If you own a home that has seen better days, the estate agent will not value it the same as a home that’s been well looked after. You then have the issue of waiting for it to sell. With a cash house buyer, the guaranteed sale means that no matter the condition, it’s still going to sell. You just may have to accept a lower offer. Otherwise, it could sit on the open market for months not getting a single viewing.

Cash house buyers tend to offer less too due to the other costs they absorb. In most cases, there are no fees or legal costs for the seller to worry about. This means that even with less on the table, the cash in your bank account from the sale might be more than it would be if you had paid for solicitors, estate agent fees, and more.

Are there benefits of a cash offer on a house, even if offered less?

Yes. Especially if you want a hassle-free, fast house sale. Selling your house to a cash buyer guarantees this and removes the concern that a buyer might pull out or attempt to reduce their offer dramatically at the last minute. We’ve picked a few of our top reasons why accepting an offer from a cash buyer could help you achieve your property plans much more quickly.

Fast house sale

Perhaps the core reason people prefer cash buyers is that the house can be sold fast. In the case of selling with Bettermove, your home is sold based on a timeframe that suits you. If you need your home to sell in just seven days or within four weeks, our team will make it happen.

Gone are the concerns about whether the buyer will get approved for their mortgage, gone are the worries that the house you’ve inherited will be stuck in the family for months, and gone are the worries that your home may sit on the market with no interest for weeks on end. Instead, you simply reach out to a cash house buyer and within days, your home can be sold.

Much has been made of the turbulent housing market over the past few years, Covid-19, the cost of living, and yo-yo-ing rates have made it hard for buyers to buy and sellers to sell. A cash house buyer removes all of this, allowing both parties to keep the market moving.

What’s more, the speed at which cash house buyers work means that should a sudden change in circumstances arise, you don’t need to worry about it disrupting your life. A new job, troublesome neighbours, or the need to move closer to the family can all be accommodated rapidly.

A guaranteed sale

Knowing the sale is fast is one thing but knowing it is guaranteed is another. Without having a fear that the buyer will suddenly pull out, you can accept the lower cash offer knowing that the house is 100% sold. Many cash buyers are property investors and see opportunities in your home. These opportunities mean they are less likely to change their mind, and with guaranteed funds, you have the added peace of mind that a sale to a cash buyer is more secure.

Where buyers in the more traditional market have to seek mortgage approval, and then potentially change their mind if the mortgage seems to be too expensive, cash buyers are mortgage-free. This further adds to the security of accepting the offer from the cash buyer.

Fee free

In most cases, cash house-buying companies offer a fee-free model. This saves the seller potentially thousands of pounds. Think of the conveyancing, the legal costs, and estate agent fees. Then add in the expense to bring your home up to scratch for a new buyer. Based on figures we took from Home Owners Alliance, this could all soon total more than £4,000. Selling to a cash house buyer takes away those expenses.

Cash buyers don’t need to meet any lender criteria and, in many cases, buy any house in any condition. Furthermore, they offer to pay legal costs too. And, with no estate agent getting involved, the fees they charge (typically 3% of the sales value) are also no longer a concern.

Chain free

A chain break can be one of the most frustrating aspects when trying to sell a house. You’ve spent time and money and have a buyer lined up, then somewhere further down the chain, something happens. The sale is suddenly disrupted and either on hold or permanently stopped. Never ideal when you want a quick sale. Cash buyers don’t break chains, in fact, there is no chain to break, as the whole process is one, seamless transaction between you and them. Nobody else is involved.

Should I accept a cash offer for my house if it’s less than the market value?

The final decision lies with you, however accepting less for your home could see you not only gain a fast house sale but also end up with more cash than you thought. With our cash house-buying model, it is quite possible for you to make a gain of £7,500* compared to what you may get from a traditional estate agent. Where their fees and the associated costs soon mount up, our lower cash offer, without fees, makes it possible for you to be better off financially. Of course, much will depend on the property, its location, and its condition so you should always speak to us in advance to get an accurate offer on your home.

Circumstances also play a part. If the need to sell arises from debt, a new job, or other personal issues, accepting a lower offer with a guaranteed sale from a cash buyer may help you navigate these events much easier.

If, on the other hand, you have no urgency to sell and are willing to see how the market plays out, selling for less to a cash house buyer may not be as worthwhile. The only issues here, as we touched upon earlier, are that you still run the risk of a chain break, a buyer pulling out, and the length of time it may take once you’ve accepted an offer.

Can I advertise my house to cash buyers only?

You can, and whilst this may limit your pool of buyers, it will give you a certainty that those interested can buy the home immediately and without any issue.

In many cases, homeowners deciding to sell their home to cash buyers only do so as they are aware that the current state of the property may make it hard for a mortgage to be secured for buyers. With cash house buyers not needing a mortgage, the sale is much easier to complete.

Can I offer less as a cash buyer too?

Of course, if you are in a position to buy a house with cash, you could certainly approach a seller with an offer under the asking price. Showing proof of funds, therefore enhancing your credibility as a buyer may be enough to sway them into accepting an offer that gets them their sale fast and you into a new home.

Selling to a cash house buyer for less may not sound ideal but the positives are certainly worth considering. The guarantee of a sale built around your needs puts you in a position you just can’t find with a traditional estate agent. As we mentioned earlier, in some cases, after the various costs you encounter selling via the more typical route, a cash house buyer sale could see you better off. Why not contact our team of property experts today and see how we can help you get the quick sale you’ve missed out on in the past?

*You may or may not gain more from selling via a cash house buyer. Various considerations are taken into account when an offer is made on a home by a cash house buyer.