Cash Buyer Tips

For most of us, purchasing a new home requires a mortgage because we simply do not have enough liquid cash to buy the property outright. That is not the case for everyone however and in this article, we will take a look at the pros and cons of being a cash buyer.

Advantages of being a Cash Buyer

  • Buying with cash means that you are instantly appealing to the seller. There is no mortgage to apply for so no chance of being rejected by the bank. This security makes cash buyers very appealing to sellers
  • No interest to pay on the mortgage, which ultimately makes owning the property a lot cheaper
  • No stress around the mortgage rates and needing to re-mortgage every few years to keep your costs down
  • Because often there is no downward chain and no mortgage application the buying process will be significantly faster and much more hassle free.
  • Cash buyers tend to be in a better negotiating position due to their appeal to the seller so might be able to negotiate a larger discount.

Disadvantages of Cash buying

  • Buying with cash ties up a lot of your liquid assets which could be used at a later date or even be there for an emergency. At the most basic, you need to make sure that you don’t spend too much and then can’t afford the upkeep of the property
  • Fewer required checks and balances as to the property valuation which would be insisted upon by a mortgage company. This means that you might not know the true condition of the property.

Tips for Cash buying

  • Be wary of sellers only advertising to Cash buyers. It could be that the property is unmortgageable due to condition or being in a high-risk flood area.
  • Have a registered surveyor carry out a full survey of the property to ensure you fully understand its condition. As a cash buyer it is advisable to commission an RICS level 3 survey.
  • Ensure that you ask your conveyancer to carry out all the relevant searches and checks to make sure there are no nasty surprises.

Buying a property outright without a loan or a mortgage has some massive advantages, but the risk is 100% yours. Make sure to carry out proper surveys and searches to make sure you fully understand what you are buying.