Sell your house fast for cash…
If you’re selling a property that’s not suitable for mortgage lending, or you just require a very quick sale, then you will need to find a cash buyer. At auction cash buyers compete to purchase, ensuring you receive the best possible sale price.
A fast house sale usually requires a “cash buyer” who can complete quickly without having to satisfy the requirements of a mortgage company.
So how do you find a cash buyer? There are 3 ways, each having its advantages and disadvantages. This article looks at the speed, reliability and likely sale price for selling to a cash buyer (1) direct to a quick sale company (2) introduced through an estate agent, and (3) at public auction.
Last updated by Mark Grantham on 28th May 2017
However, it’s not as straightforward as that. If you dig a little deeper it becomes clear that many of the property buyer companies are not genuine purchasers, even if they say they are. The majority don’t have the cash funds required to complete on the purchase. Instead, they either broker the purchase to another buyer (and take a cut for their fee) or use an option agreement or some other mechanism to make sure they profit from the sale of your property, even if you end up selling for considerably less or considerably later than expected! And the real problem with selling to a broker is you’ll be locked out of selling to anyone else for several months, even then there’s no guarantee of selling.
1) Don’t sign anything – a genuine cash buyer won’t need you to sign any upfront agreements. If they ask you to sign an option agreement or anything similar then it’s a clear sign they’re not a genuine cash buyer. The only contract you need to sign is the contract of sale, and that will be provided to you by your solicitor.
2) Use your own solicitor – even if the property buyer offers you free legal services, our recommendation is to use your own solicitor. A solicitor appointed by the property buyer may be bias and there’s a risk they won’t provide you with all the information you need!
3) Ask for confirmation in writing – to ensure the property buyer is a genuine cash buyer ask them to send you an email confirming they’ll be purchasing your property themselves, not brokering the sale to a third party. Also ask them to provide you with a copy of a recent bank statement showing funds are available for the purchase.
4) If the offer seems too good to be true, it probably is – remember that the property buyer is in business to make a profit and will be offering about 85% of market value at best, if they’re offering more they’re probably trying to get a foot in the door and the offer will almost certainly be reduced before exchange of contracts.
Whilst there are some genuine quick house sale companies who offer a good service and purchase with cash, in our experience the majority of quick sale companies are in fact property brokers. Even if the company has a professional looking website, with good reviews and is a member of a property ombudsman scheme it doesn’t necessarily mean they’re a genuine cash buyer.
Estate agents often say “cash buyer” even when the purchase is being partly mortgaged – which can add a lot of delay and uncertainty to the sale. Just as with quick sale companies, when you’re dealing with estate agents ask them to confirm by email that the buyer is a genuine cash buyer and most importantly ask for a recent bank statement as evidence of cash funds. Don’t be afraid to ask as many questions as you want, and ask for replies in writing. Estate agents are generally very good salespeople and where there is doubt they can do a very good job of offering reassurance, even if it’s false reassurance. If the estate agent is using phrases like “I understand the buyer is…” or “as far as I know…” then they’re not answering the question properly! If you’re not getting concise answers, then you know where you stand.
Sale by public auction is different; it gives everyone the chance to bid for your property, not just the lucky individual selected by the estate agent!
And contrary to popular belief, selling at auction is actually fairly straightforward. Once you’ve signed the auctioneers terms of business, the bulk of the work is carried out by the auctioneer and your solicitor.
In our experience, a quick house sale company or property investor introduced through an estate agent will not offer any more than an auction reserve price. So if you need a fast house sale don’t feel that you need to “panic sell” to a property buying company. It may well be that you’ll sell for considerably more at auction, and just as quickly.
When weighing up your options, bear in mind that it’s not just cash buyers that attend auctions, they’re also attended by owner occupier buyers who might have plans to take out a mortgage – it’s these buyers who typically offer considerably more for a property. It’s estimated that one in three buyers at auction are “owner occupiers” and that number is said to be increasing, especially in times when market conditions are difficult for buy-to-let investors.
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