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What To Expect When Buying A Home With Cash

What Is A Cash Buyer?

You are classed as a cash buyer if you have the monies readily available when making an offer on a property.  If you are relying on the sale of another property to free up the cash on completion, then you are not officially a cash buyer when negotiating on the next property.  For example, if you are relying on the sale of your property to make you mortgage-free, you are still not a cash buyer at this time. Here at Cash Home, we have put together some ideas for what you should expect when buying a home with cash.

The Advantages Of Buying With Cash

The main advantage when buying a property with cash is that the sale tends to be completed sooner.  Because you aren’t relying on mortgage valuations or for mortgage funds to be released, then your timeline may well be shorter, making you an attractive buyer for most sellers. Sales can sometimes go through as quickly as 30 days from your offer being accepted.

You are also more likely to be able to offer a lower price than some other potential buyers as you will be able to negotiate more flexibly and most sellers will snap up the chance to have a cash buyer as this often means chains are less likely to stall or house offers on other properties involved to fall through.

Disadvantages Of Buying With Cash

Just because you are a cash buyer, does not guarantee that your offer will be accepted.  Some non-cash buyers may already have all of their finances in place and perhaps be in a position to move immediately, just like you may be.  You may also be competing with other cash buyers and may need to put in higher offers to secure the property.   

If the market is aggressive then you are also less likely to get a great deal just because you are a cash buyer. Also, just because you are a cash buyer and perhaps can complete quickly, does not necessarily mean that the seller will be swayed to choose you.  They may be in no rush to sell, or may not have found a property to purchase themselves yet.

Legalities When Buying With Cash

When buying a home with cash, you will still need the services of a solicitor or conveyancer to complete all of the required legal processes for you, such as searches, checks, and stamp duty tax.   You may still wish to have some kind of survey of the property.  Just because you don’t need a mortgage, doesn’t mean you shouldn’t check the house thoroughly, especially for older properties.   You have to pay stamp duty whether you buy with cash or have a mortgage. Make sure you factor in the stamp duty costs and solicitor fees when making cash offers on a property. You will also be expected to show proof of funds to your solicitor.  This is to ensure that the property is not linked to any criminal activity.  Anti-money laundering checks will take place. You may be asked to show evidence such as bank statements to show where the funds are coming from to purchase the property

After Buying The Property With Cash

If you decide after completion that you do in fact wish to take out a mortgage for that property then some lenders have restrictions about how soon that can happen after the sale has gone through.  There are also usually loan-to-value ratios to take into consideration too before they will agree to lend you the money. Some people choose to take out a mortgage after buying with cash so that they can finance renovations on the house, or sometimes their circumstances have changed. Here at Cash Home, we can give you advice about all of the processes if you need our support.

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