There are many reasons why you may look to sell your house for cash, such as paying for care, part of a divorce settlement, mortgage arrears or when moving to another property. There is one critical question when looking at we buy any house: how much below market value? This will depend upon the property’s condition and how much additional work is required.

In this article you won’t just learn the pricing of properties in excellent condition with no work required. We’ll cover all the way across to those with structural problems, where there may be significant investment needed to create habitable conditions.

How is the discount to market value calculated?

It is difficult to give definitive figures, as each case has to be assessed individually, but these are the ballpark figures we use when considering offers:-

1. Excellent condition: 15% below market value
2. Good/average condition: 20% below market value
3. Poor condition: 25% below market value
4. Structural problem: 30% below market value

So, if we buy any house, how much below market value will vary. However, we offer attractive rates compared to our competitors and swift settlement.

Traditional savings when selling to a cash buyer

We prefer to be honest and upfront because if we buy any house how much below market value is obviously very important to the seller. Before we look at what issues a cash buyer may consider, it is crucial to understand the time and cost savings associated with a cash sale to Cash House. These include savings on:-

1. Mortgage payments
2. Legal costs (covered by us)
3. Agency fees (not required)
4. Refurbishment costs (not required)

As you can see from the image below, these cost savings can be significant and change the financial balance favouring a cash sale.

No exposure to transaction chains

One of the most critical elements of a cash sale is removing the dreaded transaction chain. Many looking to buy or sell a property will have experienced that “so near but yet so far” moment. When one of the buyers pulls out, and the chain collapses.

This can effectively put you back to the start, and the process begins again. You will likely incur duplicate costs as well as being left exposed to market movements. This is not the case with a cash buyer; funds are already available, ready to invest with completion usually between four and six weeks. The fact we have our legal team waiting to begin the process when a price has been agreed upon has a considerable value in itself. We also cover their fees!

Issues with your home won’t prevent us from making an offer

We have acquired many homes which have varied in condition from excellent down to those with structural problems. We appreciate that when we buy any house, how much below market value will be an essential factor for you to consider. Consequently, the following information will guide you on how we assess properties and how this will impact our cash offer.

As part of this, however, it is essential to note that we are taking away the risks faced from you as a seller if we choose to re-sell at a later date. This is whether buying a property in excellent condition or one with structural damage, before we put it back on the market, there may be various issues we encounter. This means the property may not be income producing for some time. Other issues we could encounter after purchasing and attempting to re-sell include lengthy transaction chains, maintenance costs and finding a buyer.

Property condition will influence our offer price

We categorise potential purchases into four different categories, as covered below. However, within these individual categories, there will be varying extents of work/investment required:-

Excellent condition

In theory, when we buy a property in excellent condition, there should be minimal if any additional work for us to carry out. This reduces the potential risks associated with selling or renting properties. Therefore allowing us to make an offer closer to the market value at around a 15% discount.

Good/average condition

When selling a property in good/average condition, many homeowners feel pressured to fund improvements before putting their home up for sale. We appreciate that many homeowners will not have the additional funds required, maybe unsure of recuperating any additional investment and therefore looking to sell their home as seen.

This type of property tends to require a varied amount of additional work, which might include:-

1. Redecorating
2. Gardening work
3. General maintenance and repairs

Due to the cost and time taken to carry out this additional work, we tend to offer cash purchase prices around 20% below market value. Considering that homes requiring general maintenance and repairs could turn off potential buyers, this is a fair assessment of the situation.

Poor condition

For various reasons, we are often asked to consider properties that are in poor condition. These are homes which may require:-

1. New windows
2. New roof
3. Rewired
4. Decorated
5. Kitchen/bathroom suites updated

There is a general misconception that properties in a relatively poor condition will not receive offers, this is not the case. In reality, if we buy any house how much below market value reflects the underlying condition.

Structural problems

It is no secret that properties with structural problems can be challenging, with additional issues often discovered further down the line. We have experience with this type of home, and historically we have faced issues such as damage/movement to:-

1. Roofs
2. Floors
3. Walls
4. Foundations

Many of these issues are caused by ground heave or subsidence, often requiring relatively expensive remedial work. As mortgage companies are unlikely to consider properties with serious structural problems, this will immediately reduce the potential pool of buyers. A large number of flats requiring fire-proof cladding fall into this category after the Grenfell disaster. In this scenario, we would look at offers starting at 30% below market value, influenced by the degree of structural damage.

Upfront and honest

Some cash buyers may use their initial offer as a starting point. However, from the outset we will explain the reasoning behind our offer. There will be scope for negotiation at times, but this may be limited because we offer highly competitive rates from the outset. We see no point in presenting an indicative offer only to slash this further down the line. This does not fit our business model, and we are not in the market to waste your time.

Summary

Hopefully, we have explained that if we buy any house how much below market value will depend on several factors. We prefer to be upfront and honest about our assessment and believe that we offer good value for money. If you need a quick sale of your house please feel free to contact us at any time.