Why some properties can only be sold to cash buyers
We have all seen the adverts: “we buy your property for cash”; “we can buy your home within a matter of days” but we have also seen headlines where sellers who have been paid less for their property than it’s really worth or worse, pull out of the purchase prior to exchange.
So why would anyone sell their property for cash at a discount price? Jason Harris-Cohen is the Director of Open Property Group and is a professional buyer.
“I spend all day, every day, chatting with people who need to sell their property but for one reason or another can’t do so on the ‘open market’. “ Jason explains there are five leading reasons why a property has to be sold for cash:-
A property is unmortgageable
Not all lenders will lend money on all properties. Some, for example might not lend on a flat which is a conversion from a house, while others won’t let you borrow money to buy a flat if it is higher than four stories.
Properties which need renovation
Although many people love to buy a property and renovate it, when serious amounts of work is required, such as fixing subsidence or a property has been fire damaged or just needs a lot of TLC, it can be difficult to find a buyer and a lender willing to take the risk of financing the purchase.
With the growth in the Private Rented Sector, there are some landlords who want to sell their property with the tenants in situ. In this case, it is likely that the landlord will want to sell to someone who will look after the tenant post the purchase and many lenders don’t support purchases with a tenant in the property.
Short lease flats and houses
If a property is leasehold and someone else holds the freehold, lenders don’t normally provide mortgages for properties which have a lease length of less than 75 years. As many properties were originally given 99 year leases, this means more can’t be sold on the ‘open market’ because only cash buyers can purchase them.
Most properties we see are made of bricks and mortar, but some are different construction such as concrete, steel frame and pure timber properties and these are rarely supported by your everyday lender.
So, some properties are just destined for the ‘cash buyer’ market. However, following a recent Office of Fair Trading investigation into ‘quick sale’ companies, they concluded that although some ran a professional service, many don’t and if you have to sell to a ‘quick sale’ company, how do work out who are the professionals in the sector?
According to Jason, “there are hundreds of companies offering to buy property for cash, but they are not all the same. Some are large professional buying companies like ours, which work with reputable developers to purchase properties for part-exchange and have funding agreements with well-known banks and building societies. Others are just individuals who buy properties with their own funds and may need to secure a mortgage to buy, while some simply gain your interest, agree a price with you and then ‘sell’ your property as a ‘lead’ to other property buyers with cash, so you don’t know who you are actually selling to.”
We have enclosed a testimonial from a recently satisfied customer: Mr and Mrs C sold their house fast in Beckton, East London
Open Property Group were competing against several competitors in the quick sale sector to purchase a freehold house in London.
Mr and Mrs C had found a property in Surrey and needed to proceed quickly in order to be the chosen purchaser.
Lily Cove of Open Property Group acted immediately and visited the property to carry out a drive-by valuation.
A price was agreed within 48 hours and solicitors instructed by both parties. Following receipt of the solicitors documents contracts were exchanged within 14 days and a completion date fixed to suit the sellers.
Open Property Group strive to be the leading cash buyer of property in the express-sale sector. We have unparalleled experience in dealing with all types of property - whether it be vacant, let or with problems. All types of property are considered, and in any condition. Contracts can be exchanged within the sellers timetable too.