The truth about cash buyers

"We buy any house." At what price?

8-minute readBy Mike CraddockBeen approached? Check your offer →

Why we set this up

I set up Property Auction Expertise because I was dismayed by the number of homeowners being targeted on social media to sell for far less than their homes are worth. This is my way of putting that right.

How they find you

In the last few years a huge number of cash-buying firms have appeared, targeting homeowners who need to sell fast. Social media has made it easy: they advertise on Facebook and Instagram to people under pressure, present themselves as helpful and trustworthy, and suggest they'll pay close to market value.

How the offer works

In practice their profit depends on the gap between what they pay you and what your home is actually worth, so their offers are always well short of full value. Typically, that's 70 to 80% of market value. Many of these homes are then resold for considerably more.

Their profit is the gap between what they pay you and what your home is worth.

The late price cut

Over 90% of sellers we have spoken with find the price is then cut again late in the process, when they're already emotionally and financially committed. It happened to a recent client.

Cash offer
£140,000
Cut late to
£120,000
Sold at auction
£193,000
£73,000 more

"We'll cover your fees," decoded

When a company offers to cover all your fees, look at the overall deal. The real cost is hidden in a much lower purchase price, and it can be the equivalent of paying an agent 25% or more. By comparison, estate agency and auction fees in the UK are modest.

25%+
What "free" fees can really cost, as an agent's commission.

What it really costs

Most people don't think of their home equity the way they think of their bank balance, but they should. A £200,000 home with a 60% mortgage means £80,000 is yours. A cash buyer could take £40,000 to £50,000 of it. Try your own numbers.

£50k£2m
You could be giving away
£0
MortgageYour equityKept by the cash buyer
Get a proper valuation from Mike: book a free 15-min call

Illustrative only, based on typical cash-buyer offers of 70 to 80% of market value. Your result depends on your property, location and market. Mike will give you a proper assessment on the call.

What to do if you've been approached

Check your offer in 60 seconds.

Seven quick questions. No judgement, no sign-up. You'll see which warning signs apply, and what each one means.

Question 1 of 7

Five red flags. Screenshot this.

Share it with anyone you know who's thinking about a cash offer.

Cash offer red flags
  1. 1They found you through an ad, leaflet or cold call.
  2. 2The offer is well below what nearby homes sold for.
  3. 3“We’ll cover all your fees.”
  4. 4A deadline, or pressure to decide fast.
  5. 5The price drops once you’re committed.
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