If you’re buying or selling a property, you’ve probably heard of the term “cash buyer”. This doesn’t mean the person has a wad of money in their back pocket ready to spend on a house; it just means that they have enough in the bank to buy without requiring a mortgage or loan. This is great because it means the buyer can put an offer down and not be beholden to a bank.
There are plenty of cash buyers around, such as retirees moving down the market or buy-to-let investors, but it’s important to tread carefully with this sort of transaction. In lots of cases, the cash buyer won’t have the funds available until the sale of their property, which often causes confusion. Often an estate agent will fail to mention to the seller the exact financial position of the cash buyer. Sellers are often under the impression that if someone is a cash buyer they will be keen to progress at a favourable speed. However, if the buyer is dependent on a sale, it can take a lot longer than expected to complete the sale.
An agent must always confirm the prospective buyer’s ability to proceed by means of bank statements. This will prove that the buyer has sufficient funds available and the sale can progress fairly quickly. There are obvious advantages for a seller to accept an offer from a cash buyer and you can request from your agent that offers are only made by cash buyers.
With that said, buyers should be wary of sellers who have requested a cash only sale, because it could imply there is something wrong with the property. For example, if the house has significant damage and is possibly uninhabitable, it will be different to obtain a mortgage on it.
Please be aware that the above information should be used as a guideline and should not be used in place of any serious legal advice. For more support on the matter, don’t hesitate to get in touch and a member of our expert team will be able to help.
Categorised in: News
This post was written by Dennis Adam