Buying a house in cash

There are many benefits to buying a house in cash, but also some important considerations.

What is a cash buyer?

A cash buyer purchases a home without needing a mortgage or selling another property to fund the purchase. If you need to sell a property to finance your new purchase, you are not considered a cash buyer.

Can you buy a house with cash?

Yes, buying a house in cash is possible and can be beneficial for both you and the seller. However, there are some considerations before deciding to buy in cash or obtain a mortgage.

Is it better to buy in cash when buying a home?

Here are some pros and cons of being a cash buyer:

Pros of buying a house in cash:

1. More reliable buyer: As a cash buyer, you don’t require a mortgage and aren’t relying on the sale of another property, reducing the risk of a collapsed chain. This makes you more attractive to sellers.
2. Less stress: Without the complexity of mortgage approval, the buying process is simpler and less stressful.
3. Quicker purchase process: Buying in cash eliminates the time needed for mortgage approval, making the transaction faster.

Cons of buying a house in cash:

1. Liquid cash tied up: Your money is committed to one asset, making it less accessible for other needs.
2. Limited leverage: You miss out on potential returns from leveraging a mortgage in a rising property market.
3. Other investment options limited: Tying up all your cash in property may reduce your ability to diversify investments.

How to buy a house with cash

The process of buying a house with cash is similar to buying with a mortgage but simpler and potentially faster. Here’s what to expect:

1. Find a property and make an offer.
2. Offer accepted.
3. Instruct a solicitor.
4. Instruct a survey/valuation.
5. Solicitor conducts searches, queries, and checks.
6. Completion and transfer of funds.

Documents needed for buying a house with cash

You will need to show proof of funds, typically via a bank statement, and may need to show the source of your funds under money laundering rules. This can include:

• Savings account statements
• Confirmation of gifted money
• Evidence of inheritance

Do you need a solicitor when buying in cash?

Yes, you still need a solicitor to handle the legal work, such as liaising with the seller’s solicitor, dealing with documentation, raising buyer enquiries, and transferring funds. While local authority searches are mandatory with a mortgage, you can choose whether to complete them when buying in cash.

Is buying with cash quicker?

Yes, buying a house in cash is generally much faster than buying with a mortgage because there is no mortgage application process or loan-related legal work.

Can you get a mortgage later after buying with cash?

Yes, you can remortgage the property later, subject to affordability checks and lending criteria.

Top tips for buying a house in cash

1. Be cautious with properties marketed to cash buyers: They may have issues making them unfit for mortgage lending. Always ask the seller’s agent why the property is cash-only.
2. Always conduct searches: Even though not mandatory when buying with cash, local authority searches provide peace of mind by flagging potential issues.

By considering these factors, you can make an informed decision about buying a house in cash.