How to Make a Cash Offer on a House – With or Without Cash

If you are in the market for a new house and find a great property for sale within your budget, it’s highly unlikely that you will be the only buyer looking at it. The UK property market is incredibly competitive. One way you could potentially improve your odds of your offer being accepted over the others is if you can pay with cash. Although it sounds like a good idea on paper, is making a cash offer, whether you have the funds available or not, the best option? What is involved in making a cash offer? To help you find the answers to these questions for your own circumstances, we are going to talk about making cash offers on the property in greater detail in this post.

What is a Cash Offer and How Does it Work?

First, let’s discuss what a cash offer is. It’s really as self-explanatory as it sounds – you find a property that you are interested in buying and have the funds available, so you make an offer without the need for a mortgage. While it’s true that a strict interpretation is that a cash offer is only a cash offer if you have the monetary funds available, some buyers and sellers consider all offers of the money in the full to be cash offers. That means situations where you are waiting to close the sale of your current property or another property to get the funds needed.

How Do You Make a Cash Offer??

Now that we have discussed what a cash offer is, how do you make a cash offer on a property you are interested in? There are several key steps involved, including:

Make a cash offer on the property, with the help of an estate agent or another housing market expert, where possible.

Come to an agreement on the purchase price between you and the seller (this is likely to be different from their asking price)

Obtain and submit proof of funds in the form of a letter from your bank outlining their contact details, the available funds in your account or accounts and a signature from an official representative of the bank.

You should also hire a professional conveyancer solicitor to handle a home inspection and appraisal to make sure you know the condition of the property. The last thing you want to do is pay more than the property is worth or be stuck with a lot of repairs and renovation work the seller didn’t tell you about.

While the basics of making a cash offer outlined above refer to situations where you have access to monetary funds, what if you want to make a cash offer, without having access to the cash?

How Do You Make a Cash Offer Without Paying Cash?

As we have discussed, in a seller’s market, cash offers provide buyers with more of a fighting chance of securing the property they want. How can you still benefit from this edge without having access to the cash needed? As the saying goes “where there’s a will, there’s a way”.

Financing Options

If you really want to make a cash offer, but don’t have access to the funds yourself, then you could engage the services and financial backing of a company that will pay for the property with cash on your behalf. You then would need to pay that company back through a mortgage.

These kinds of companies have the funds to use for properties, and can often promise a quick closing that attracts the seller. Once the transaction has been completed, the company effectively owns the property while you secure a suitable mortgage Then when you have a mortgage in place, the company that bought the property on your behalf will sell it to you.

Although this may be your only choice, you need to understand that many sellers do not really see this style of cash offer as genuine cash offers, because they aren’t really. Some sellers may not accept these kinds of cash offers.

Rather than putting you off from trying this method, it’s just worth keeping that fact in mind so you can manage your expectations more realistically.