How to know if a cash buyer is really a cash buyer
How to know if a cash buyer really is a cash buyer, and what makes them attractive purchasers of your property
We’re all familiar with the term ‘cash buyer’. But what does it really mean and how does your agent determine if a buyer really is a cash buyer?
In the first, and most straightforward sense, a cash buyer is simply a buyer who has money sat in the bank, readily accessible to purchase your property with. They will be able to demonstrate this financial capability with ease to your estate agent, and that there is no loan, mortgage or gift from family involved in the purchase of your property.
The advantages of having this type of cash buyer for your property are that they are not reliant on the sale of any other property or asset and are in a position to progress their purchase faster than other buyers. Also, because they are not beholden to a lender, when matters come up as part of the conveyancing process, they, and they alone, are the decision-makers on how they wish to proceed and what level of searches and survey to have on your property, putting them in a stronger position than any other type of buyer when it comes to moving fast.
The second type of cash buyer is one that will still, like the first type, be purchasing your property with cash, so again no mortgage is involved. But they are reliant on the sale of their property in order to release this cash. Their solicitor will be able to provide your estate agent with confirmation that there is no mortgage or other charges against their property and confirm that the agreed sale price will provide the readily available cash required on completion of their sale.
Whilst this second type of cash buyer has the same agility in the decision-making process as the first type of cash buyer, their speed and certainty at being able to move forward is by no means as strong. They are reliant on everyone else in their chain progressing at pace too, and without hinderance.
It’s important to be aware of the differences of these varied types of buyers and how they can affect you and your sale. It’s common for buyers to suggest that they are cash buyers when in fact they only mean that their funding is in place for their purchase, perhaps by porting an existing mortgage or having a decision in principle on a new mortgage. It’s equally important that your estate agent investigates what type of buyer you potentially have, so they will ask them for proof of their cash status and if they aren’t a real cash buyer, it will very quickly come to light so that you can make a decision if you want to progress your sale with them.