Buying or selling a house can be a stressful process because there are so many things that need to go well for the sale to be completed. This is especially the case when you’re relying on a mortgage that takes time to be accepted and can leave you stranded if it falls through.
Becoming a cash buyer can offer solutions to many of the problems most people have when buying property and that is why this is becoming an increasingly popular option in the United Kingdom.
What Is a Cash Buyer?
One of the problems with the term ‘cash buyer’ is that it is often misunderstood, and this can lead to miscommunication between buyers and sellers.
A cash buyer is someone who is in a position to be able to buy a property with cash at the point of offer. This means that you cannot be considered a cash buyer if you need to sell your current property before being able to buy a new one.
This misunderstanding can become an issue because sellers sometimes believe they are dealing with a cash buyer, meaning that a sale would be wrapped up quickly. However, if the person needs to sell their current property before being able to pay, they are not a cash buyer, and there may be significant delays and problems further down the road.
Nevertheless, if you are a real cash buyer then there are several advantages to buying a property in this way. Sellers wondering ‘why won’t someone buy my house?’ could also see the benefits of a cash buyer over other options.
No Mortgage Complications
A mortgage application is a hurdle that many people find themselves stumbling over when trying to buy or sell a property. One of the biggest issues is the fact that mortgage agreements in principle don’t carry a huge amount of weight. After all, they’re only agreed in principle and this means that they can fall through when complications arise.
Many people mistakenly believe that a mortgage deal in principle is secure unless something major occurs prior to sale completion. The most obvious issues include things such as job losses, increased debts, reductions in salary, and so on. However, mortgages can be affected by much smaller issues such as incorrect paperwork, so there is plenty of room for frustrations to occur.
On the contrary, a cash buyer doesn’t have to worry about this because there is no mortgage application to complete and less third parties involved who could change their mind. Therefore, a sale is much more likely to go through.
Another issue with mortgages is the fact that they can take a long time to complete. For example, although a mortgage application may be fully approved, the buyer may not have access to the funds required to make the property purchase for a matter of weeks or even months. This is frustrating for both the buyer and seller because it provides a bigger window of opportunity for something else to go wrong and potentially delay or even halt a sale entirely.
A cash buyer doesn’t have this issue because they already have the money required to make a quick transfer of funds to the property seller. This reduces the time available for something to go wrong along the way and means a sale can be made quickly, benefiting both the buyer and seller.
Less Potential for Weak Links in the Chain
Buying a house seems like a simple process but many property sales fail because there are so many points of friction along the chain of purchase. This is especially the case for people who are not cash buyers as the links of a chain can extend beyond the scope of a single sale.
For example, if Person A wants to buy a house from Person B, they may have to wait until Person C comes along and buys their existing property to raise the required funds. Not only this, but Person A and B are now at the mercy of Person C being approved for their mortgage, too. It’s all extremely complicated and can be frustrating at the best of times, especially when it only takes something minor to occur to throw a spanner in the works.
When there are so many links in the chain, it only takes one person to change their mind or run into an issue with mortgage approvals to cause a sale to fail completely. Before you know it, you’re witnessing a domino effect from one weak link in the chain, and everyone is back to square one.
On the contrary, a cash buyer doesn’t have to worry about this because their sale process contains fewer links. They do not have to wait for someone else to apply for a mortgage and buy their existing property to be able to buy the house they want. They also do not have to wait for a lender to offer them a mortgage. Fewer links lead to fewer points of friction and, therefore, an increased chance of a successful property purchase.
Increased Financial Security
Worries about the future don’t end when a mortgage is approved. You’re constantly governed by your current circumstances and someone with a mortgage can run into trouble if their finances are negatively affected. In fact, being unable to make mortgage payments can lead to homes being repossessed.
Again, a cash buyer does not have this issue because they have paid for their property in full and, therefore, own it outright. If a cash buyer’s financial circumstances change for the worse, they still do not need to worry about their home being taken away from them as there are no mortgage payments to make. This provides a much-improved sense of financial security that should not be overlooked.
Ultimately, cash buyers have the benefit of requiring fewer things to go right for a property sale to occur. Most of the issues experienced by buyers come down to having so many links in the chain of sale. If one thing goes wrong, the sale can fail completely.