Can you buy a house with cash?

You absolutely can buy a house with cash, providing you have the funds upfront to hand over to the seller. But like anything, it comes with its own advantages and disadvantages. We’re going to run through the pros and cons of buying a house with cash, so let’s start off with the pros.

What are the benefits of buying a house with cash?

More reliable buyer

If you already have the money to buy the house upfront, it means there’s less room for things to go wrong. For instance, you won’t have to pass any affordability checks from the lender, you won’t be caught up in a chain, have to wait for valuations to be carried out, or for funds to be released etc. All of these things make you a more attractive buyer.

Less stressful

As there is less room for things to go wrong, the sale is pretty much guaranteed to go ahead. If you’re the seller, this means you don’t have to worry about things such as your buyer getting their home loan approved.

Quicker process

Getting a home loan can take time. You have to wait to go through affordability checks, then your home loan offer has to be approved before the funds are released. Cutting out this part of the process means that a cash buyer should be ready to move more quickly. The only thing you’ll have to wait for is the legal checks and any surveys (if you decide to have a survey).

More security

As you’re paying for the house outright, you don’t have to worry about being able to afford your monthly home loan repayments. Even if the worst were to happen and you became unemployed, you’d be able to rest assured knowing that you still have a roof over your head.

No interest

With any home loan, the lender will charge you interest on the amount of money you’re borrowing. However, if you’re a cash buyer then you won’t have to pay any interest at all. You won’t have to pay any other charges either, such as early repayment charges (ERC).

What are the disadvantages of buying a house with cash?

Overstretching yourself

Finding the money to buy a house outright is quite an achievement, however, you need to be careful that in doing so, you aren’t tightening the purse strings too much. You need to make sure that after you’ve paid for the house, you still have enough money for the running costs e.g. utility and food bills.

Offers below the asking price

Often cash buyers know that they’re in a strong position, so they might be more likely to try their luck and make an offer below the asking price. Although this might not be what you had in mind, it’s worth asking yourself, what’s more important to you; a quick sale, no-chain buyer, or holding out longer for a bit more money?

Faults with the house

Sometimes properties are listed asking for ‘cash buyers only’. This can raise a few eyebrows as it could indicate that there’s something wrong with the property which means it would be difficult, or impossible, to get a home loan. For instance, there could be structural issues, such as subsidence or fire damage. 

For more information on moving house or getting on the property ladder, please feel free to contact our friendly team and we can put you in touch with a broker local to you.