Cash buyers often have greater buying power and they make up a sizable percentage of the market. There are, of course, advantages and disadvantages to completing a purchase using cash, but these transactions are generally speaking less likely to fall through.
Cash purchases can take the stress out of home-buying
Buyers have been hit with higher mortgage rates in recent months and in some cases, the property purchase has not gone through as a result, which is costly and frustrating. This makes borrowers less attractive, especially in a chain where disruption is a potential issue. Around a quarter of sales in England and Wales regularly fail to complete. Buying with cash means this link in the chain is more robust.
According to The Telegraph the percentage of cash buyers in the market has risen to levels not seen in the last eight years. Almost 40 percent of purchases have involved cash buyers thus far in January.
Some buyers are unable to secure mortgages
Even with an agreement in principle for a mortgage, a lender may still decide, for a variety of reasons, not to go ahead with the offer. If the sale does not proceed, the purchase falls through and the seller has to search for a new buyer, which stalls the entire chain. A buyer with cash will not require a mortgage, so the completion is usually guaranteed. A cash sale will release funds to the vendor rapidly, and the process can be completed in weeks. A mortgage application, however, can take over a month.
Greater chain resilience with cash buyers
House purchases can fall through for a variety of reasons, from a buyer simply changing their mind or finding another suitable property. Situations can also change for both cash buyers and borrowers. In the current climate, with unpredictable interest rates and softening demand for properties, anything that adds resilience to the process is to be welcomed. The cost may be in accepting a lower offer from a cash buyer.
A homebuyers’ survey is an essential element
Cash buyers and borrowers alike will need to confirm the value and state of repair of a potential purchase. A homebuyers survey cost can vary significantly across the country and is further affected by the property type and value. If you are relocating and require this professional service, you can find out more at resources such as: https://www.samconveyancing.co.uk/news/house-survey/homebuyers-survey-cost-9958.
Cash buyers enjoy the security that a purchase brings
It’s easy to understand the appeal from a cash buyer’s perspective. They complete the transaction with a cash sum and own the property outright. In addition to securing a preferential purchase price from sellers under pressure, there will be no concerns such as repossession, in contrast with many mortgage holders.
Cash sales can still fail
Cash purchasers can still change their minds so nothing is certain until exchange. They may, for example, opt for an alternative property if the homebuyer’s survey reveals significant issues.