Understanding House Buyers and Dealing with Offers

When selling your house, it is understandable that you want to get the best offer possible. However, there are other things to consider before you accept an offer. Here we look at the different types of buyers you can expect to meet and how to deal with their offers. 

While each buyer who views your house will be looking for different things in a prospective new home, there are three main types of house buyers. These are: 

1. First-time buyers coming from the rental market
2. Those funding the purchase by selling their current property
3. Those buying outright using cash, often property investors expanding their portfolio 

First-time buyers 

First-time buyers are attractive prospects because they won't be part of a housing chain. This means they can rely on something other than selling their current home to raise the cash to buy yours. 

In most cases, when selling to first-time buyers, your sale will be faster because you won't be waiting on other property owners in the chain to complete their sales for yours to move forward. 

For the sale to go ahead, your estate agent will check the first-time buyer's situation to ensure they have a mortgage agreement in principle in place. Some prospective first-time buyers think they can put an offer on a property before securing a mortgage agreement, which could mean they may need extra help to afford your property. 

Buyers in a property chain 

When you get an offer from a buyer who needs to sell their current property before buying yours, they are part of a property chain. The chain may be short; for example, they may be selling to a first-time buyer themselves, which means there will be a lower risk of the chain breaking. 

However, if your prospective buyer is in a chain of ten or more, there is a greater risk of delays or your sale falling through completely because another part of the chain has collapsed, which has a knock-on effect on your sale. 

The security and strength of each individual part of the property chain are crucial here. If all buyers and sellers in the chain are well prepared with solicitors and correct paperwork, surveys etc., the more chance you have of your sale going smoothly. 

Cash buyers 

Cash buyers have to be the most desirable of the three main types of house buyers. Sales can go quicker and be much smoother with a cash buyer because they will already have the money upfront to buy your house. They do not need to arrange mortgages and wait for a decision from a mortgage lender. 

One downside of selling to a cash buyer is that they may try to negotiate for a much lower offer than you want. A cash buyer offers a higher level of security, and flexibility is attractive, and if you want to move quickly and snap up your next home, it is a compromise you may be willing to accept. 

Is an offer legally binding? 

Knowing that you or your house buyer can pull out of the sale at any point before exchanging contracts is helpful. A prospective buyer making an offer on your house is not legally binding, so accepting an offer doesn't mean the buyer is legally obliged to exchange contracts with you. 

The selling process can be lengthy, especially when you factor in the time needed for viewings, surveys, local searches, and price negotiations. Only when all this preparation work is done, and both parties have signed and exchanged contracts, will the agreement be honoured by law. 

Conclusion 

No matter what type of prospective buyer is interested in your house, it can help keep on top of your paperwork, respond quickly to queries, and supply all the information your buyer needs to make the sale go smoothly. 

Looking to sell? We’ll be happy to discuss your situation and advise on the best course of action. 

Please contact our team here.