When selling your house, the question of how long it will take to complete the sale is always on your mind. One of the factors that significantly affect the duration of a house sale is the type of buyer.
In this insight, we will explore the question, how long does it take to sell a house to a cash buyer, comparing it to a sale involving a mortgage, and discuss the advantages and potential pitfalls of selling to a cash buyer.
A cash buyer is someone who can afford to buy a property outright, without the need for a mortgage. This means they have the funds readily available at the time of making an offer on a house. Cash buyers make up nearly a third of all property sales.
It's important to note that if you can only afford to buy a house without a mortgage once the sale of your current house has gone through, you are not considered a cash buyer.
A house sale involving a cash buyer is typically quicker than one involving a mortgage. This is because there are fewer hurdles to overcome, such as mortgage approvals and property valuations. As a result, cash sales can take as little as a few weeks, while mortgage-based sales can take several months.
However, the exact duration will depend on various factors, such as the speed of the conveyancing process, the searches when buying a house, and the seller's circumstances.
The conveyancing process for a cash buyer is similar to that of a mortgage buyer, but with fewer steps. For instance, there is no need for the buyer's solicitor to liaise with a mortgage lender. Consequently, the conveyancing process is generally faster for cash buyers, potentially taking around 30 days in most cases, provided there is no onward chain on the property.
While cash buyers are not obligated to conduct local authority searches, it is still advisable to do so to understand any potential issues with the property. These searches can take anywhere from a few days to several weeks to complete, depending on the local authority's efficiency.
The seller's circumstances will also impact the duration of the sale. If the seller is also buying another property and needs the funds from the sale, the cash purchase may not proceed as quickly as initially anticipated.
Generally, a house sale is quicker with a cash buyer due to the absence of mortgage-related delays. Cash buyers do not need to wait for mortgage approvals or valuations, which can reduce the overall timeline of the sale.
However, if the property is part of a chain, the cash buyer's ability to move more quickly may not necessarily be an advantage. In such cases, the cash buyer will still be dependent on the timescales of the seller and other parties involved in the chain.
While cash buyers are generally considered more reliable than mortgage buyers, there is still a possibility that a cash buyer may back out of the sale. This can happen for various reasons such as a change in financial circumstances, personal reasons, or finding another property they prefer.
However, the risk of a sale falling through with a cash buyer is comparatively lower than with a mortgage buyer, who might face challenges in securing mortgage approval or meeting the lender's requirements.
There are several benefits to selling to a cash buyer, including:
As mentioned earlier, cash sales generally complete faster than mortgage-based sales due to fewer hurdles to overcome.
Cash buyers are not reliant on the sale of another property, making them chain-free. This reduces the risk of the sale falling through due to complications in the property chain.
Cash buyers are often considered more reliable than mortgage buyers, as they do not need to secure mortgage approval or meet lender requirements.
Cash buyers may be able to negotiate a lower purchase price due to the certainty and speed of their funds. Sellers may be more willing to accept a lower offer from a cash buyer for a quicker and more secure sale.
Despite the advantages, there are also potential pitfalls when selling to a cash buyer:
While a lower offer from a cash buyer might be attractive to sellers seeking a quick sale, it may result in a lower overall sale price for the property.
By focusing solely on cash buyers, sellers may be limiting their pool of potential buyers, which could lead to a longer time on the market or a lower final sale price.
Cash buyers are required to provide proof of funds to demonstrate they have the money to complete the purchase. This is a legal requirement for the estate agent to ensure the house purchase is not a result of criminal activity. Proof of funds can include bank statements or other financial documents.
Some properties are listed as "cash buyers only" for various reasons, including unusual construction, structural problems, or the seller seeking a quick sale. Cash buyers are free to buy any property they can afford, making them more attractive to sellers who have properties that are difficult to sell through traditional means.
Cash buyers may also consider purchasing a house at auction for a potentially lower price and faster sale. Auction sales are legally binding upon the fall of the hammer, eliminating the risk of the sale falling through. However, it is essential to thoroughly research the property and consult with a solicitor before bidding at an auction.
Selling a house to a cash buyer can be quicker and more secure than selling to a mortgage buyer. However, it is essential to weigh the advantages and potential pitfalls of selling to a cash buyer to make an informed decision. If you're looking for an agent to sell your home to a cash buyer, consider our online estate agents comparison.
Stuart is an expert in Property, Money, Banking & Finance, having worked in retail and investment banking for 10+ years before founding Sunny Avenue. Stuart has spent his career studying finance. He holds qualifications in financial studies, mortgage advice & practice, banking operations, dealing & financial markets, derivatives, securities & investments.
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