When trying to sell a home quickly, will a cash buyer speed things up?
Firstly, let’s clarify what is meant by a ‘cash buyer’ as there’s often some confusion around this term. A true cash buyer is someone who has the full funds readily available at the time of offer and does not need to rely on selling another property or obtaining a mortgage to complete the transaction.
Cash buyers are appealing because, in many cases, they can complete the purchase quicker than a mortgage buyer who requires financing. However, it’s crucial to verify that a buyer claiming to be cash-ready has funds available and doesn’t have any hidden contingencies that could delay the sale.
- Cash buyers can often close a deal more swiftly since they don’t need to go through the mortgage approval process, which can take weeks, or even months. For someone in your situation, where time is of the essence, that speed can make a difference, especially if you have an offer on a new property and a tight timeline for completing your own sale.
- Properties that require extensive repairs or upgrades can be challenging for mortgage buyers. Many lenders require such properties to meet certain conditions before approving financing. If your property has issues that could be flagged by a surveyor — like structural concerns or a need for significant renovation — a mortgage lender may be hesitant to finance it. Cash buyers, on the other hand, typically don’t need to satisfy these requirements, making them a viable option for properties in less-than-perfect condition.
- In a cash sale, you can reduce the holding costs associated with a longer selling process. These costs include mortgage payments (if applicable), utilities, council tax, insurance, and maintenance fees that would continue if the sale took longer. By accepting a cash offer and closing sooner, you may save money on these ongoing expenses.
- Cash buyers generally make offers with fewer contingencies. Mortgage buyers may include financing contingencies, appraisal contingencies, and other conditions in their offer, which can prolong negotiations or even derail the deal if conditions are not met. Cash buyers can be more straightforward in this regard, which could lead to a smoother overall process.
Mortgage buyers may be willing to offer closer to your asking price than cash buyers. Cash buyers, particularly investors, often aim for a discount to offset any work they’ll need to invest in the property. By accepting mortgage offers, you may have a greater chance of securing a higher price, provided the buyer’s financing and due diligence can proceed without delay.
Limiting your search strictly to cash buyers may reduce the pool of interested parties. In a competitive property market, mortgage buyers can be highly motivated and may be just as committed as cash buyers, especially if they are keen to secure a property quickly. As long as they have a mortgage agreement in principle, many mortgage buyers can move forward nearly as quickly as cash buyers, especially with the help of a proactive agent.
- Since your property requires work, obtaining a professional inspection can be invaluable. A report by a chartered surveyor or other building professional will provide insight into potential issues that may affect the sale. Understanding the extent of the repairs required upfront can help you market the property honestly and set appropriate expectations for buyers. If there are significant issues that might deter mortgage lenders, you can decide whether to address these repairs or price the property to reflect its current condition.
- Having all your legal documents in order is essential for speeding up the sale process. Make sure you have copies of property deeds, planning permissions, building regulations, and any recent surveys or certificates on hand. A well-prepared package of documents helps ensure no unexpected issues arise and reassures buyers they are dealing with a serious seller.
- Small improvements, like fixing leaky taps, painting over scuffs, and tidying up the garden, can go a long way to creating a positive first impression, even if you’re not planning on major renovations. Cash buyers may be less concerned about cosmetic details, but a clean, well-maintained appearance could still increase the appeal of the property and encourage stronger offers.
- Clearly communicate the work needed so potential buyers understand the property’s state upfront. Transparency builds trust and can prevent deals from falling through later due to unexpected findings in the buyer’s survey. For properties that need work, honesty about the property’s condition can be a strong selling point for investors looking for renovation projects.
- Whether a buyer is paying in cash or obtaining a mortgage, their financial position matters. A cash buyer who genuinely has immediate funds may offer a quicker, hassle-free sale. Mortgage buyers with strong financing in place can also be reliable, provided their mortgage has been pre-approved.
- Cash buyers often look for discounts to offset the convenience they provide in a quicker sale. If your goal is to close the sale rapidly, you may find it worthwhile to accept a slightly lower offer. However, if you’re flexible with the sale timeline, you might prefer to hold out for a better offer from a mortgage buyer.
- Keep in mind cash buyers will still carry out their own due diligence, which could include a comprehensive survey or checking legal aspects. Cash offers do not necessarily guarantee an “as-is” purchase, and buyers may still seek price reductions if significant issues are found.
- Majella Galvin is chair of the membership and public affairs committee of the Society of Chartered Surveyors Ireland. A chartered surveyor, estate agent and registered valuer at DNG Galvin Auctioneers, Bandon, she has been working in the property sector for over a decade — www.dnggalvin.ie If you have a property-related query or issue you would like to raise with Majella, please email irishexaminerpropertyqueries@scsi.ie