How Much Discount Should You Expect with a Cash Buyer?

Cash buyers have been a growing force in the UK property market in recent years. Zoopla estimate as many as 1 in 3 sales were to a cash buyer last year. 

The advantage of selling to a cash buyer is you will get a simpler, faster sale without the risks that come from being stuck in a property chain. But one thing all genuine cash buyers have in common is they expect to buy your property at a discount. 

How much of a discount will depend on a range of factors but the amount offered could be up to 20% lower. That sounds a lot, but before you dismiss the idea altogether you should consider whether the certainty, time, money and effort saved by selling to a cash buyer is worth more than potentially waiting months to sell on the open market. 

Why are Cash Buyer Offers Lower?

Cash buyers will want a discount because they are an attractive option for several reasons. 

Speed – A genuine cash buyer is buying with their own cash, so won’t need to delay the process waiting for mortgage lender approval. 

Certainty – A cash buyer is a ‘chain free’ buyer. They don’t have a property to sell. This significantly reduces the risk of the sale falling through and speeds up the process as you aren’t stuck waiting for people further down the chain.

Save on fees – If the cash buyer is a house buying company rather than a private individual then it’s very likely they’ll cover your legal costs, and you won’t have to pay any estate agent fees. 

How Much Will Cash Buyers Offer?

The actual level of discount that a cash buyer will want will be dependent on a wide range of factors, including the condition of the property, it’s location and how competitive the local property market is. Typically, a cash buyer will start with a low offer and will be expecting you to counter offer and negotiate. 

Not all cash buyers are the same.

Private individuals buying with cash typically will demand smaller discounts, but the sale is still likely to take months to complete due to the complex legal checks that need to be completed, and you will have to pay estate agent and solicitor fees as part of the sale.

Professional property buying companies will demand bigger discounts, but the sale can be completed in weeks and with no estate agent or legal fees. This is because these companies cover your costs and as they buy lots of property they work with trusted solicitors who can complete the legal checks in a fraction of the time. 

At House Buyer Bureau, we ask for a 20% discount on a property’s value. In return we provide a quick cash sale with little to no hassle, done in a timescale of your choosing. 

Beware though. Some property buying companies will hook you with a higher cash offer, only to reduce it just before you are due to exchange contracts. Make sure you only talk to genuine, reputable cash buying firms that buy property at fair prices. 

I would highly recommend HBB. I did some research following 2 separate buyers pulling out, one as we were due to exchange contracts due to not having an adequate mortgage. I was in pieces when I initially spoke with Suzanne who was totally honest. I was aware we would not get the full value but with help from family, it was the best option. Kerrie then took over who was absolutely fantastic, particularly when the house buyer report took 10 days, not 2 and the delayed date we were hoping to complete. If you are in a position similar to ours and can accept less than the market value. Genuine and honest, totally upfront I cannot thank them enough.

What type of properties do cash buyers make offers on?

Any house can be sold to a cash buyer, but there are certain situations where a cash buyer is much more likely to be your best option.

Fixer Uppers / Older properties

Many properties built before the 1960’s do not meet today’s modern building standards. This can make them more difficult to sell as they often need major repair to bring them up to standard. Depending on the extent of repairs, some lenders can be reluctant to lend leaving these types of property only suitable for cash buyers. 

Japanese Knotweed

Japanese knotweed is a rapidly spreading weed that grows through solid ground and causes significant problems for a property’s foundations. Many lenders won’t lend on affected properties, making them suitable only for cash buyers. 

Structural Issues

Fixing a structural issue can cost tens of thousands and take months of work. For this reason, structural issues can put off a ‘normal’ buyer and attract cash buying investors or property buying companies. 

Damp

Depending on how bad the damp is you might find that lenders won’t want to lend on the property without having the issue fixed and an insurance backed guarantee the problem has been resolved. This can cost a lot of money and take time to resolve, making properties with damp far more suitable to cash buyers. 

Short lease

Leasehold properties with less than 80 years left on the lease have become very difficult to sell on the open market. Lenders aren’t keen to lend, and many buyers are put off. As demand for flats is high, cash buyers often see potential in these properties as rental opportunities and are happy to incur the cost of extending the lease.

Poor location

Lenders can take a dim view of some properties based on their location. This can put many buyers off and limit you to cash buyers only. 

Properties in flood risk areas, close to old mines, former petrol stations, risks of landslip, high crime areas can all be difficult to sell on the open market. 

How Can House Buyer Bureau Help?

Here at House Buyer Bureau, we’ve been buying property since 2010 and are one of the longest established property buying companies in the UK.  We buy houses in any condition and we can help if you’re looking to sell your fast. We specialise in buying property quickly and we can buy your house in as little as 7 days. 

We have cash available in the bank to buy property immediately so there is never a delay waiting for funds to be put in place. Selling to us also means you won’t pay any estate agent fees, survey costs or legal fees (if you use our recommended solicitors).

We are a member of The Property Ombudsman and so we adhere to their code of conduct, meaning dealing with us is always simple and hassle-free and we never put you under and pressure to sell us.

Get your free no-obligation valuation today

Chris

Chris

Chris has worked in property all his career, first as a successful estate agent before spotting a gap in the market for buying property directly from people looking for a simple, quick sale.

He has a passion for property and as an experienced valuer, has looked at well over 50,000 properties so far at HBB. He has extensive experience in property buying and regularly comments in the press on property matters, trends and promotes ways to simplify and speed up the selling process.

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