Should You Sell to a Cash House Buying Company?

Transcript

Hi, I’m Ruban Selvanayagam, co-director of Property Solvers.  In this video, I’ll be exploring whether selling your home to a cash house buying company is the right option for you.

Hello again, everyone – so today, I’m gonna go through what companies like ours actually do, when it makes sense to consider us, what to watch out for, and what you need to know about industry regulations (or lack of them) – so you can make the best decision based on your specific situation.

So, let’s start with the basics…

A cash house buying company is a firm that can purchase your property outright, using its own funds, without the need for mortgages or secured loans.

This can dramatically reduce the risk of sales falling through, as there’s no waiting on finance approvals or other chain-related delays.

But it’s important to remember that not every company advertising themselves as a “cash buyer” genuinely has immediate funds. 

For example, some depend on third-party finance or private investors, which can cause delays and other complications – similar to what often occurs when selling on the open market.

Selling to a cash house buying company typically makes the most sense if you need to dispose of the property quickly, for example, due to the imminent threat of repossession or other kind of financial challenge, probate, divorce, or relocation in a short space of time.  

Many homeowners also want to avoid the uncertainties of selling a house or flat that has issues. Here at Property Solvers, for instance, we often work with landlords who are looking to sell up – often due to the punitive taxes and other regulatory changes that are happening in the industry. 

We’re also active buyers of properties that most people would typically avoid. This includes homes affected by Japanese Knotweed, structural issues, restricted access, fire or water damage, and legal title defects like possessory titles or very short leases under 50 years.

Our clients prefer a simple, straightforward sale without endless viewings, negotiations, or waiting months for exchange and completion.  What’s more, in most cases, there will be no legal fees or estate agency costs to pay as you’re selling directly to the firm.

It’s important to remember that these advantages often come at the cost of accepting a price that’s below the full market value.

Cash house buying companies typically offer between 70 and 80% less than what you might achieve on the open market.

This discount reflects the company’s need for a margin, the speed we can provide, and the level of certainty that’s rarely possible when selling through an estate agent and even at auction

For many homeowners we work with, this trade-off makes sense, especially if they need fast access to funds and are willing to accept a discounted price.

For others, particularly if they can afford to wait, it may be worth exploring other options or simply staying with the estate agent a nd reducing the price to attract more serious buyers.  This is indeed what we suggest to many sellers who get in touch with us.

One of the most important things to be aware of is that cash house buying is not a strictly regulated industry. This can leave space for unscrupulous operators who might mislead sellers with false promises, sudden price reductions, or unfair contract terms.

That’s why it’s essential to look for companies affiliated with reputable organisations, such as The Property Ombudsman (TPOS) and The National Association of Property Buyers (NAPB).

Property Solvers is proud to be part of both, and as we have widened our services over the years, we’ve also affiliated with NAEA Propertymark and Trading Standards. These memberships ensure we operate with transparency and professionalism, giving our clients confidence and peace of mind.

However, even if they’re part of these organisations, it’s vital to check the credibility of any cash house buying company you’re considering. 

First off, request recent proof of funds, such as a bank statement or written confirmation from a solicitor, to show they have the cash available now.

Ask for clear evidence of completed purchases under similar circumstances, so you know they can deliver on what they promise.

Never sign a lock-in or option agreement at any point during the transaction. The company must be honest about their cash offer from the start and not drag things along only for the price to be dropped often before exchange and completion.  For example, watch out for companies that will promise something in the region of 80 to 85% when the eventual sale price ends up being much lower.

Finally, look out for the cash buying firm’s verified reviews on platforms like Trustpilot, Google Reviews, or Reviews.io, which reflect experiences from other sellers.

But what if you’re keen on the idea of selling for cash but don’t want to accept a heavy discount. Another alternative option worth considering is to auction your property.

When your property sells at an unconditional or traditional auction, the buyer exchanges contracts as soon as the hammer falls and is legally obliged to complete, usually within 28 days.  Now , if they don’t, they could face financial penalties, lose their deposit and face potential legal action.

This gives you strong legal protection as a seller, and competitive bidding can — by and large — result in a higher final price compared to selling directly to a cash buyer.

However, it’s important to be aware that auctions are public sales rather than discreet transactions; details of the property and sale are marketed openly to attract bidders.

Auctions also come with set-up and marketing fees, auctioneer commissions, and legal fees (unless you stipulate in the Special Conditions that the buyer should pay), so you’ll need to balance these costs and the lack of privacy against the potential benefits of a higher sale price.

Watch this space as I’ll be doing more videos on auctions in the future.

So, should you sell to a cash house buying company?

• If your priority is a fast sale with certainty and you’re willing to compromise on price, working with a genuine cash buyer can be the best option.
• If you have more time, auctioning your property could achieve a better price while still giving you an excellent level of legal protection.
• If price is very important to you, then – provided you’re realistic, willing to wait and potentially deal with a few hiccups – then working with estate agent is often a good way to go.

At Property Solvers, we’ve spent nearly 2 decades helping quick home sellers find the right solution for their needs.  

If you’re exploring the option of a fast sale, we’d love to have a chat.  A big thanks for watching to the end and, if you have any questions, please feel free to contact myself