If you’re like many who are looking to sell their home, you may wonder how those companies offering cash for houses really work. After all, they’re a fairly new idea in the UK real estate market. For much of the past half-century, when people wanted to sell their home, the only option was to consult an estate agent. Companies that pay cash for homes, though, don’t work that way. In fact, much of what you know of how buying a property – the process in the UK – works doesn’t really apply when you’re dealing with these companies. Wondering how it does work? Take a look.
The traditional way of selling a home is long, complex and the seller is often encumbered with many fees including a hefty commission from an estate agent. Companies that purchase houses with cash work differently. They connect with individuals who are looking to sell their homes quickly. The process usually begins when one of these individuals reaches out through a website or a phone call to explore the possibility of the company buying their house. Within just a few days, the company does a bit of research and makes a preliminary offer. If the seller is interested, a survey team is sent over. Once the results of that survey are in, the company makes its final offer and the seller can either accept it or reject it at that point.
The benefits to homeowners here are enormous. There are no repairs required, no estate agents or property showings to worry about, and the entire deal can be completed in as little as fourteen days. The benefits to these companies are just as big. They have a great selection of properties they can renovate and sell or rent to tenants.
A Fairly Old Idea
The practice of buying homes with cash is not new; well before cash buying companies appeared on the market, real estate investors and landlords frequently offered cash for run-down homes. These individuals then renovated the homes and either sold them or rented out the property. However, today there are formal cash-buying companies that operate in a much more organized manner; their entire philosophy is to make the purchase of a home with cash painless and fast. Today there are several variations of cash buying companies that include the following:
- Investors who have the cash to pay for homes; these investors usually buy homes, renovate them and then either flip them for a profit or rent out the property.
- There are also a few real estate companies that also purchase properties or cash; their primary aim is to buy the properties cheap, make renovations and rent them out.
- Finally, there are formal cash-buying companies that have an online presence and often buy properties without even looking at them.
In each of the above cases, the goal is to buy a property for cash and restore it. Homes in urban areas are more likely to be bought for cash than homes in rural or isolated areas of the country. In addition, these cash buying companies only buy condos, flats, or single-family homes. Large properties, mansions, and palatial homes are usually avoided as they cost a lot of money and can be expensive to fix.
Buying a Property – A Process UK Owners Control
Working with a company that pays cash for homes is a process entirely controlled by the seller.
Unlike the traditional way of selling a home where much of the control is in the hands of the estate agent, with cash home buying companies, the seller makes all the decisions regarding the sale of the home. There are no third parties involved.
Once you provide the company with details about your house, they will send you a cash offer without even seeing the property. However, this cash offer is usually between 75 to 80% of the market value of the property; it is very rare that you will be offered more than 80%; and in most cases, there are no negotiations. You either accept or decline the offer. You usually have a very short window to make a decision; if you do accept the preliminary offer, the company will schedule a home inspection to determine the state of the home. If major repairs are required, this will also impact the final offer. Sometimes the company may permit you to make the repairs to the home in order to avoid lowering the home price further.
In most cases, there is no fee to buy your home. If you accept the final offer, closing is usually done in a matter of weeks.
Selling a home to a company like these doesn’t make sense for everyone; it just depends on your home and your personal circumstances. But if you are ready to sell fast, this is easily the best option.