What does it mean to sell your house for cash? There are various motivations for selling your house for cash. For instance, you may need to sell off a house so that you can relocate to another part of the country. Sometimes, you may be in possession of inherited property that you would like to dispose quickly. In other instances, a job loss could put your house at risk of repossession owing to mounting debts. Selling a home could also be a way to evict an errant and adamant tenant. Regardless of the motivation for selling your home in the UK, the sale has some implications. Let’s look at what you stand to gain or even lose by selling your house for cash and what it really means.
What Do You Stand to Gain?
There are companies that specialise in the cash purchase of homes. Given that such firms understand that a seller looking forward to make a quick sale may be in a desperate situation, the firms can easily prey on you. As such, their strategy mostly involves paying the least possible amount for your home. Therefore, you may end up selling your house for a price that is significantly lower than the prevailing market value. In some cases, you may end up being short-changed by unscrupulous firms. That sounds like a bitter pill to swallow, but it’s the reality. You can be certain that such firms would end up making a tidy profit from purchasing and subsequently selling your home.
Let’s assume that you financed your home through a mortgage. However, you’ve been unable to service your loan for some time. Rather than lose your home after defaulting on your loan payments, you may consider selling it for cash to offset the loan. However, this option may lead to more issues. Firstly, the cash you receive may not be sufficient to pay off the loan. Secondly, most mortgages tend to include punitive clauses meant to discourage early loan repayment. As such, you may be required to pay a premium on the remaining loan balance, which could be beyond your reach. Lastly, the firm purchasing your home takes title in light of the existing mortgage. This implies that the title is subject to your loan. Should the firm fail to pay off the mortgage, you would still be liable.
Alternatively, you can consider selling your house to a conventional or ordinary homebuyer as opposed to a firm. The former tends to offer a higher price and is a better option than the latter. In fact, an ordinary buyer would more likely finance their purchase through a loan, which would in turn offset your pending mortgage. This would be a reprieve for you. You would also not have to undergo the strenuous process of listing or advertising your house, which can be expensive. Thus, this option assures you of a stress-free sale and a better price.
Nonetheless, if you opt to list your house with a conventional property agent, it might take a while to sell your house. You would also have to list the house at a high price to factor in the agent’s commission or fees upon the sale. As a result, you may end up being stuck with a house that you previously intended to sell quickly. Similarly, the process of selling a house using the conventional process can be extremely tedious and challenging. If you were planning to relocate, an unsold house could end up derailing your plans. Thus, it would be prudent to sell your house for cash, albeit at a lower price and get on with your life.
Overall, by selling your house for cash you can enjoy the following benefits:
- A quicker sale thus availing much-needed cash on time
- Lower selling costs- no need to list your property or pay commissions
- Offset debts such as mortgages and avoid losing your property in case you had cash constraints
- Greater convenience- simple and less tedious process of selling your house
Some Precautions to Take Before Selling Your House for Cash
To avoid being shortchanged by unscrupulous homebuyers or firms, it’s prudent to understand the legal issues relating to the sale of your home in the UK market. By understanding your obligations and rights before putting your home up for sale, you can approach the sale from an informed standpoint. That way, you can avoid some of the common missteps that could lead to immense loss. Considering the value of your home, and the risks associated with selling, arming yourself with the right information is very critical.
Your safety is of utmost importance while making a sale. It’s common to hear of people who allowed criminals into their homes and suffered immensely as a result. Take the necessary precautions before allowing potential buyers into your home. For instance, you may note down the buyer’s name, ID number and their car license plate number. By screening your prospects, you can deter would-be criminals from preying on you. More importantly, it serves as a reference point for the police, should you be a criminal’s target.
You may also request for proof of funds from a potential buyer. A buyer who may not have documentary evidence that they can pay for the house should be a cause for alarm. Be wary of anyone who cannot evidence their ability to pay for a house such as a through a bank statement.
Overall, selling your house for cash means greater convenience, a quicker sale, and lower selling costs. However, ensure that you take the necessary precautions to avert the innate risks of selling your home. Although a cash sale has its drawbacks, it can be an ideal way to get cash quickly when you are facing pressing cash needs.