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.
See what you could expect, then compare it line by line with the true net proceeds of an estate agent sale.
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.
What cash offer should you expect?
Typical cash offers run 20% to 30% below realistic market value, depending on condition and value. Higher value homes can sit at the larger end because cash buyers in Scotland usually pay the 8% Additional Dwelling Supplement (ADS). Good condition properties tend to fall closer to 20%. Remember that on the open market a home needing work will not achieve the good order value either: in Scotland the Home Report surveyor values the property as it stands, so repairs, damp or a dated kitchen pull the valuation down and buyers then price the work in on top.
What a similar home nearby sells for once it is done up
Typically 1% to 2% plus VAT
Home Report, solicitor and marketing
Could be 6, 12 or 18 months depending on your local market
Mortgage, council tax, insurance, utilities
Approx cash offer you should expect
£135,000
Based on 25% below realistic market value.
What it costs you to sell with an estate agent
What you get with a cash sale
On these figures an agent sale could net £22,282 more, but the timeline is unlimited and you still carry the chain, viewing and fall-through risk. If you need to sell now, the cash route gives you certainty and the money to use straight away. This is an illustration only; every offer we make is explained line by line.
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?
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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.
Can I negotiate the offer?
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Yes. If you have evidence that the market value or the repair costs are different from our assumption, tell us and we will look again.
Are there any hidden fees?
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No. The figure you accept is the figure your solicitor receives, and we cover the standard legal costs.
Is a cash sale ever the higher net outcome?
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It can be, particularly on properties needing significant work, empty homes with running costs, or sales that would otherwise take many months.
More selling guides
Home Report Scotland
What a Home Report covers, when you need one, and how selling directly removes the cost.
How Long Does It Take to Sell a House in Scotland?
Average timescales for an open-market sale and how a cash sale compares.
Cost of Selling a House in Scotland
Estate agent fees, legal costs, Home Reports and other selling costs explained.
Related guides and tools
Cash buyer or estate agent?
The two routes compared on price, speed and certainty.
Read moreThe cost of selling a house in Scotland
Every fee from Home Report to solicitor, with realistic figures.
Read moreTime to sell calculator
See a realistic range for how long an open market sale takes, and what waiting costs.
Read moreSelling a house that needs repairs
Damp, structural issues and selling as is.
Read moreSelling for a particular reason?
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