The process of selling a home is a simple one, right? You list your home, a buyer comes along and makes an offer, you accept, and that’s the end, right? For many home sales, that process is entirely true. When a cash buying company steps into the picture, though, the property buying process is significantly different. If you’re a home seller considering working one of these companies, it can pay off to have a better understanding of the process as a whole, how to choose the right company to buy your home, and what to do when you’re ready to sell.
Why Cash Buying Companies Are Becoming So Popular
In today’s difficult economic times, some people are not able to maintain their homes and would like to quickly sell for cash. These homeowners have been increasingly turning to companies that offer cash for the property, and cash buying companies in the UK are slowly becoming popular because they are able to meet the needs of home sellers. There are many reasons sellers choose to work with these companies:
- Job Loss
- Debt Load
- Divorce
- A Move
- A New Job
- An Inherited Property
- An Unwanted Rental
- Home Repossession
The reason that these companies are such an attractive option is that the property buying process is fast compared to the traditional way of selling a home. A home can be sold with a national cash buying agency within just 2-3 weeks compared to an average of 2-6 months via the traditional route. The reason for the short time to process is because there is no mortgage involved and most homes are sold in as-is condition, so there are no renovations required and the results of the home survey usually don’t impact the sale.
The Property Buying Process with a Cash Buying Company
If you do choose to go with a cash buyer, how does it actually work? It begins when you select a company. Today there are at least half a dozen cash buying companies in the UK alone and for the home seller selecting the right company can be a daunting task. While all of them do offer cash for a property, they are not all equal in terms of functionality. You’ll want to choose a company with good reviews. You’ll also want to select one that has works closely with the Property Ombudsmen or other regulatory schemes to help ensure you’re working with a reputable company.
Once you select a company, you typically just reach out, and they come to see your home and make an initial offer. After the offer, you begin working with a solicitor to help protect your interests, and they hire qualified surveyors to help finalise the offer. Once they’re satisfied, they offer a final offer, you sign the paperwork, and then you walk away with the cash.
With this method, the home buying company purchases the property directly from you- there is no third party involved. The company will offer you cash for your property- much like you would be selling a used car to a buyer. In general, with this direct method of home buying, you will most likely receive an offer that is about 70-80% of the open market value of your home. And two factors will determine the offer you get- the condition and location of the property. Because you are selling your home at a lower price, you can expect the entire transaction to be complete in a matter of weeks. More importantly, you do not have to renovate or repair your home, there are no commission fees for a real estate agent, and the legal costs for the closing will be paid by the buyer.
This route of selling your home is ideal if you are in need of quick cash and want to sell your home without any hassles. The cash may come in handy to settle your debts and pay your medical bills. With a quick direct sale, you also avoid home repossession.
Are There Other Ways to Sell a Home for Cash?
There are other options if you’re looking to sell your home for cash. You could use a prequalified property investor. Agencies that purchase homes for cash often have a large data bank of high-net-worth buyers who are looking to quickly purchase property. These pre-qualified investors usually will offer anywhere from 80-85 percent of open market value for your property. Home sales with the use of investors usually take between 8-12 weeks, primarily because the homes need to be inspected first. Homes that are acquired as a gift or an inheritance are ideal for sale to pre-qualified investors. Sometimes, landlords who lease property to tenants may also be interested in such purchases.
You could also sell your home at an auction. Keep in mind, though, that there are additional fees associated with this method. Moreover, the value of your home depends on the bid and you have no say over it. Even if the home does not get sold at the auction, you are likely still responsible for the auction fees themselves.
How to Sell Your Home
The route you take to sell your home will depend on your circumstances, the state of your home, and your location. For some owners who want a quick sale and are in desperate need of cash, the property buying process with a cash for homes company is the fastest one. For others, a more traditional route is the way to go. You simply have to decide what might be right for you.