Does Cash Buyers Only Mean No Mortgage?
If you are in the market for a new property, you have likely spent a lot of time looking at a lot of property listings and advertisements. One phrase that you are likely to have come across at least once or twice is “cash buyers only”. Have you ever wondered what it really means? Perhaps you are wondering if it just means “no-mortgage”. In the following post, we will consider this question and why it has become a popular option among many sellers right now.
What Does the Term Cash Buyers Only Actually Mean?
Cash buyers only is a term that refers to property sales where the seller is only interested in offers from buyers who have access to the cash required to buy the property. To put it simply, and in answer to the question raised in the title of this post, yes, it does mean no mortgagers. It’s just no mortgages, though.
When “cash buyers only” is listed on a property advertisement, it means that the seller will not deal with any buyer who needs to seek out funding of any kind before being able to buy the property. Even if the buyer thinks he can get access to the funds, if there is any kind of wait or application involved, they would not be able to make an offer on the house. Similarly, if the buyer is waiting on the sale of a property to pay for the new property, the seller is unlikely to accept the offer.
The reality is, therefore, that the buyer will need to be able to provide evidence that they have the money and are ready to buy if the offer is accepted. This evidence is more commonly referred to as proof of funds.
Why is the Cash Buyers Only Method of Selling Preferred by Many?
Although it is not perfect, there are many great benefits to someone selling property to a cash buyer. First and foremost, it is a lot quicker. When buyers have the money ready, they are in a stronger position to negotiate. As they are generally tying lots of capital, they would be obviously looking to negotiate the price as low as possible.
Therefore, before you choose “cash buyers only”, it may be worth thinking about how much the amount you sell for is compared to how quickly you are looking to sell it.
Why Sell Property for Cash Only?
Although there are a lot of stigmas attached, the phrase “cash buyers only” appearing on a property listing does not necessarily mean there is anything to worry about. Especially if the property needs serious attention.
Another legitimate reason why many people selling property are interested in dealing with cash buyers only is that they are looking to avoid the long and drawn-out mortgage process and are looking for a quicker sale.
It can be incredibly disappointing when you are let down by someone who has not been able to secure a mortgage and therefore can’t buy your property.
Other Legitimate Reasons for Accepting a Cash Offer
There are other reasons why sellers may be interested in just cash buyers only, including:
- The seller is a landlord selling their tenanted property
- A recently divorced couple may be looking to sell quickly so they can move on
- The property is in the process of being repossessed – selling to a cash buyer can stop this from happening
- The seller received the property as part of their inheritance from a recently deceased friend or relative and it requires a lot of work
- The owners have other reasons why they need to sell their home quickly such as speedy relocation for a new job or to move closer to a poorly or infirm relative
You Avoid Property Chains
The final reason why many people choose to sell to cash buyers only is that it eliminates the biggest bugbear of the housing market – property chains. When people sell their property to a cash buyer, they are selling directly to that one individual or organisation. This means that there are only two parties involved in the transaction, compared to the many that are often involved in more traditional property sales.