House selling guide

Why Cash House Buyers Offer Below Market Value

A cash buyer offers below market value because they absorb the costs and risks a private buyer will not: buying in any condition, paying the legal fees, holding the property, and guaranteeing a completion date. The discount buys speed and certainty, and the gap narrows once agent fees, repairs and months of carrying costs are deducted from an open market sale.

Written for sellers in Scotland

Nobody should pretend a cash offer matches the figure on a portal listing. It does not, and any company claiming otherwise is not being straight with you.

What matters is understanding exactly what the difference pays for, so you can decide whether the trade is worth it in your situation.

How a cash offer is actually calculated

There is no mystery to it. A genuine cash buyer starts from the realistic resale value of the property and subtracts the costs and risks they are taking on. Anyone who will not show you that arithmetic is worth avoiding.

Realistic resale value in current market conditions, not the optimistic asking price
Cost of repairs, clearance and refurbishment to make it saleable
Holding costs while the work is done and the property is remarketed
The buyer's own selling costs on resale, including agent and Home Report fees
A margin that reflects committing to a price and date with no survey or mortgage clause

The gap is smaller than the headline suggests

Comparing a cash offer with an asking price is not a fair comparison. Compare it with the net figure from an agent sale after commission, the Home Report, legal fees, post survey price reductions and several months of mortgage, council tax and insurance.

On a property needing work, or an empty home with running costs, the two figures can end up much closer than sellers expect.

Step by step

1
Start from the realistic market value
Not the optimistic asking price, but what the property would actually settle at in its current condition after negotiation.
2
Deduct the cost of works
We buy as seen, so anything a normal buyer would insist on fixing is priced into the offer rather than left with you.
3
Deduct holding costs
Between purchase and resale we carry insurance, council tax, utilities, security and finance on the property.
4
Deduct our own selling costs
When we eventually sell, we pay the agent fees, Home Report and legal costs that you avoid entirely.
5
Deduct the risk premium
We commit to a price and a date without a survey clause or a mortgage condition. That certainty carries a cost.
6
Compare the net figures
Put the cash offer next to an agent sale minus commission, Home Report, legals, negotiated reductions and several months of mortgage payments. That is the only fair comparison.

Situations where the trade is usually worth it

Inherited or executry property standing empty and costing money each month
Homes needing repairs you cannot fund or manage
Separation or divorce where a clean, dated settlement matters
Repossession or arrears where the timetable is set by someone else
A chain collapse where you must complete on your onward purchase
Problem tenancies or a landlord exiting the sector

How to sanity check any cash offer

Work through this before you accept or reject a figure.

Get a realistic open market valuation from a local agent for comparison
List the repairs a buyer's survey would flag and price them
Add up agent commission, Home Report, marketing and legal fees
Multiply your monthly carrying cost by a realistic time to sell
Confirm the cash offer has no fees or deductions at completion
Confirm in writing that the price will not be reduced later
Check the buyer is a registered company and can evidence funds
Ask your own solicitor to review the offer before you accept

Frequently asked questions

How much below market value is a typical cash offer?

It varies with condition, location and how quickly the property would resell. We explain exactly how we reached our figure so you can judge it against an agent valuation.