When you're looking for a home or planning to sell, what does this mean when you see a real estate ad that says “Cash Buyers Only”? We're here to answer your questions about cash purchases.
What does it mean to be a cash buyer only?
We often say “cash buyers only” because the buyer specifically needs a quick sale. They only want offers where all the money is available immediately, without waiting for an inheritance, selling the house or applying for a mortgage.
There are many reasons why sellers prefer cash buyers. There may be a problem with the property that may make it difficult to obtain a mortgage. In this case, you are often looking for a professional investor who is willing to undertake major repairs to the property. But that's not the only reason. You may be looking to purchase at the same time and need the money quickly. There may have been previous issues with buyers withdrawing. You may not be able to get a mortgage because you have only a short time left on your lease. Or you may be relocating. It's important to know why a merchant is looking for a cash buyer. Although not required, we recommend having a surveyor survey the property.
Therefore, if you wish to purchase one of these properties, you will need to provide proof of funds such as a bank statement verified by your broker. 
Writing “Cash Buyers Only” on your property ad isn't the only way to get a quick sale. Foxtons Auctions excels at completing sales quickly and walks sellers through the process step-by-step to make it as easy as possible.
Cash Buyer vs Mortgage Buyer
What is the difference between a cash buyer and a mortgage buyer? How the buyer pays for the property. As a seller, there are pros and cons to requesting a cash buyer. By not having to wait for a mortgage offer, the process of agreeing a sale with a buyer tends to be faster and the sale is less likely to fall through. However, if you request “cash only buyers” in your real estate ad, you will have far fewer buyers to choose from. If you want to attract cash buyers, your asking price should also be low.
How do you buy a house with cash?
To purchase a home with cash, you must have available funds and provide proof of available funds when you submit your offer. Being a cash buyer doesn't mean you have physical cash; the cash must be in a bank account to comply with anti-money laundering regulations. Gifts of cash are accepted as funds.
Benefits for cash-only buyers
If you can afford it, buying with cash has advantages, especially speed and savings. Home offers from cash buyers are attractive to sellers because they are faster and easier without the risk of the sale falling through. If they are asking for cash, they may be selling at a lower asking price to facilitate this quick sale.
Since there are no upcoming chains, there are no other real estate sales that need to be completed for this property to be successful. There is no waiting period to apply for a mortgage. In the future, you won't have to worry about paying interest on your loan or adjusting your mortgage payments to changes in your lifestyle.
Disadvantages of cash buyers
There are also some disadvantages. Liquidity prevents most people from purchasing with cash. Purchasing a home with cash requires a considerable amount of capital. Needless to say, the speed of the sale may be a concern for some buyers. You must ensure that all checks have been completed and you can purchase with confidence. You'll need a conveyancer, and having a surveyor and estate agent on your side can help with the purchasing process.
Do sellers prefer cash buyers?
Although this is not always the case, most vendors do not specify “cash buyers only” as this limits who can view the property. It also means they will likely have to settle for a lower price. There are many things you can do as a mortgage buyer and cash buyer to make your offer stand out. For more information, see the article Making an Offer: How to Negotiate When Buying a Home.
