Historically, anyone looking to sell a piece of real estate was relatively restricted in terms of their options. In short, they were forced to deal with a choice of high street estate agents, incurring numerous charges and potentially delayed transactions as a result.
This is no longer the case, however, as the proliferation of online, cash buying firms has created a wider range of options and offered sellers access to numerous benefits in the process. It is important to understand this in further detail when looking to sell your home, as you look to determine the key differences in sales price and profitability associated with cash buyers.
This video (which can be found alongside other insightful videos on the YouTube channel) looks at the direct time and cost differences between selling through a traditional agent and liaising with a cash buyer, whether you are looking to offload a probate home or a tenanted property that has become loss-making.
Let’s say that you want to sell your house fast, for example, for anyone of the reasons mentioned above. Research suggests that the typical house sale takes up to four months to complete, although in the current market this may be even longer due to way in which a lack of supply has caused disproportionate price growth. This means that owners will be forced to account for four additional months of mortgage interest repayments, council tax levies, while they will also remain liable for the cost of any repairs when managing tenanted properties.
Then we must consider the standard costs associated with selling through an online agent, including solicitors and broker fees. These are usually capped as a percentage of the final sales fee, which will be deduced along with compliance costs such as stamp duty. This can amount to a hefty sum (particularly on high value homes where the stamp duty levy was recently increased), meaning that a princely amount will be deducted from the final sales price on the day of completion.
While this rigid and costly process is far from ideal, how does it compare to selling to a cash buyer? To begin with, there is no significant delay when completing a transaction, as the use of cash means that a deal can be completed within seven days. If this is not convenient to the seller, completion can be delayed until a more desirable point in time, but the date is always controlled by the client.
In terms of the additional costs, these are taken care of by reputable cash buyers such as Open Property Group. So even though you may need to pay solicitors fees in advance, these will be reimbursed by the buyer on the day of completion (while they will also save you time by sourcing a solicitor on your behalf). There are no agent’s fees either, meaning that you will not be required to sacrifice a percentage of your sale price once the deal is done.
Of course, these numbers must be balanced by the fact that sellers often must compromise on the initial sales price in exchange for a quick transaction when dealing with cash buyers. In the case of firms like Open Property Group, however, houses are usually purchased for as much as 85% of the properties market value, which is extremely competitive in the current climate. When you consider this along with the other time and financial benefits associated with a cash sale, this makes for a more profitable arrangement that is extremely advantageous to sellers.
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