Why Do Cash Buyers Offer Less Than Market Value? The Honest Answer

How does the discount compare to what a traditional sale actually costs you?

The headline percentage looks worse in isolation than it does once you offset it against what a traditional sale costs.

A typical traditional sale takes 152 days on average and carries estate agent commission (1.5–3% plus VAT), legal fees, and ongoing costs for as long as the property is on the market: mortgage payments, council tax, insurance, utilities. On a property worth £200,000, these costs commonly add up to £9,000-£15,000 or more by the time the sale completes – if it completes at all. One in three traditional sales falls through before completion, at which point the seller has spent money and time with nothing to show for it.

When you offset a cash offer against these avoided costs, and against the certainty of an actual completion, the real-world gap between the two routes is often smaller than the headline percentage suggests.

What questions should you ask about an offer before accepting it?

Before accepting any cash offer, ask the buyer directly:

How did you calculate this figure? A reputable buyer can break it down: estimated market value, holding costs, refurbishment, SDLT, risk margin.

What is your evidence for the market value you’ve used? Ask for the comparable sales they’ve based their estimate on.

Will this offer change after survey? It should not, unless a significant undisclosed defect is found. Get this commitment in writing.

Are you NAPB registered? NAPB members are required to be transparent about how offers are reached. Check directly at napb.co.uk.

Why some advertised offers of “up to 100% of market value” don’t reflect reality

Some companies advertise offers of up to 100% of market value. This is rarely a genuine direct cash purchase offer. In most cases, this kind of headline figure comes from a broker arrangement, an auction sale, or a “guaranteed price” model with extended timescales and conditions attached – not a same-week cash purchase from the company’s own funds.

The distinction matters because it affects what you are actually being offered. A direct cash buyer using their own funds, completing in 7–28 days, cannot realistically offer 100% of market value and still cover their costs. If a company’s advertised figure looks too good relative to the speed and certainty they’re promising, ask directly whether they are buying the property themselves with their own funds, or introducing you to a third party.

Frequently Asked Questions

How much below market value do cash buyers offer?

Most reputable direct cash buyers offer between 75% and 85% of a property’s market value. The exact figure depends on the property’s condition, location, and how quickly it could be resold. A buyer claiming to offer 90% or more of market value as a direct cash purchase is unusual, and worth questioning closely. Some companies advertising “up to 100% of market value” are often brokers or lead generators rather than genuine direct buyers, and the headline figure may not reflect what is actually achievable.

Why is a cash offer lower than the asking price?

A cash offer is lower because the buyer is taking on costs and risks that a seller would otherwise absorb in a traditional sale. These include holding costs while the property is resold, refurbishment if needed, Stamp Duty Land Tax surcharges on additional properties, and the risk that the market could move before the property is resold. The discount reflects the value of speed and certainty: a cash buyer is effectively paying you to remove months of uncertainty and ongoing costs from the transaction.

What costs does the cash buyer’s discount actually cover?

The discount typically covers four main areas: holding costs such as council tax, insurance, and utilities while the property is empty and being resold; refurbishment costs if the property needs work before resale; Stamp Duty Land Tax, which is often charged at a higher rate for buyers purchasing additional properties; and a risk premium, since the buyer is exposed to any fall in property prices during the resale period. A reputable buyer should be able to explain how each of these applies to your specific offer.

Is it worth selling to a cash buyer if the offer is below market value?

Whether it is worth it depends on what a traditional sale would actually cost you in time and money. A typical traditional sale takes 152 days on average and carries estate agent fees, ongoing mortgage payments, council tax, and a 33% chance of falling through entirely. When you offset the cash offer against those avoided costs and risks, the net difference is often smaller than the headline percentage suggests. For sellers facing a deadline – probate, repossession, divorce – the certainty itself often outweighs the discount.

Can I negotiate a cash buyer’s offer?

Yes, to an extent. The initial indicative offer is a starting point, and you can ask the buyer to explain their calculation and challenge any assumptions that seem inaccurate, particularly around condition or local resale values. However, once a written offer is confirmed after a survey, a reputable NAPB-registered buyer will not reduce it further without a documented reason. The negotiation point is before the offer is confirmed in writing, not after. Always ask for a breakdown of how the figure was reached.

How do I know if a cash buyer’s discount is reasonable?

A reasonable discount falls within the 75–85% range and should be explained with specific reference to your property: its condition, the local market, and the estimated resale costs. Ask the buyer directly how they reached the figure. If they cannot explain their calculation, or the offer falls well outside this range with no clear justification, treat that as a warning sign. Checking the buyer’s NAPB membership is also useful here, since NAPB members are required to be transparent about how offers are calculated.