Buying a property in cash is a luxury many can’t afford.
It comes with freedom from mortgage lenders and their stringent requirements.
However, one question often arises: is it still necessary to carry out searches?
Keep reading to find out.
Are searches a legal requirement when buying a house for cash?
The simple answer is no. It is not a legal requirement, so you can buy a house without searching.
You don’t have to reassure a bank that your property meets the requirements for their mortgage.
However, most property experts strongly recommend that you pay for searches…
Why are searches recommended?
The sellers of a house are not always honest about property issues.
It is easy to cover things up during the viewing process. Not all problems are visible to the untrained eye.
Searches examine a range of potential issues inside and outside of the house, such as:
- Flood risks
- Local planning proposals
- Environmental risks (toxic waste, radon, contaminated land)
- Unapproved extensions carried out on your house
- Asbestos
- Subsidence.
And more.
Many of these potential issues require in-depth research and checks by a professional.
In the long run, it can save you thousands of pounds if an issue is detected.
Depending on the severity of the issue, you might reduce your offer or pull out of the sale altogether.
How much do searches cost?
Most experts suggest that searches cost between £250 to £300.
This is a baseline figure that can rise for the most in-depth services. For example, searches costing above £300 might include:
- Mining search
- Chancel search
- Bankruptcy search
- Canal and river search.
You should check with the search professional to confirm what’s involved.
Gather several quotations to ensure you are getting value for money. And check company reviews to see how satisfied former customers are.
How long do searches take?
The average time for searches to be completed is 4 to 6 weeks.
If a search yields no problems, it may be finished faster than this. However, if significant issues are encountered, it may take longer.
The efficiency of the company you use will also impact the time it takes.
Should I take out indemnity insurance?
Indemnity insurance covers legal costs and damages relating to issues with a house.
This might be a solution if you need more money or time to get searches completed.
It protects you from costs if a problem arises that existed when you bought the house.
For example, this could include changes made without planning permission.
Speak to an insurance expert for more guidance on whether this is right for you.
What causes someone to be a cash buyer?
There are a few scenarios that cause someone to be a cash buyer.
Firstly, cash buying companies profit from buying properties at a discount. It enables them to buy a house that mortgage lenders would not lend on.
For example, a property with a short lease or in a derelict condition.
Sellers who accept cash offers are likely to do so because of the speed and efficiency that cash buyers provide.
Someone who has already sold their previous property might be a cash buyer. They could be renting or living at a friend or family member’s house in the interim.
Solo property developers will sometimes buy a house in cash. Many have built up wealth over with extensive property portfolios.
