How do I approach a cash buyer to sell my property with mortgage arrears?

To approach a cash buyer, make an initial enquiry with a clear summary of your property and financial position, then require the buyer to explain the proposed purchase, demonstrate that funds are available and work through the sale with an independent conveyancer. Mortgage arrears do not prevent a sale, but the lender’s charge must be dealt with before ownership can transfer.

At the first stage, provide only accurate, relevant information. This normally includes:

• the property address and type;
• whether it is freehold or leasehold;
• the condition of the property and any major defects;
• the approximate mortgage balance and arrears position;
• details of any second charge, secured loan, restriction or other borrowing registered against the title;
• whether possession is vacant or someone else occupies the property; and
• any known legal issues, probate requirements, title problems or restrictions on the sale.

Do not conceal arrears, notices from the lender, structural problems or title issues. The buyer and conveyancer will need to verify the information during the transaction, and undisclosed matters can lead to a renegotiated offer, additional legal work or the sale failing.

Ask the buyer to set out the offer in writing. Check whether it is the total purchase price or an estimate subject to inspection and legal checks. You should also ask what costs will be deducted, whether there are any conditions attached to the offer, who is purchasing the property, and whether the buyer intends to use its own funds or another funding arrangement. A genuine cash purchaser should be able to provide suitable evidence of funds through the conveyancing process. Do not rely solely on an informal valuation or a verbal assurance.

Calculate the likely net proceeds before agreeing to proceed. The relevant figures may include the mortgage redemption amount, arrears, interest and charges, any second secured borrowing, conveyancing costs, an early repayment charge and other sale expenses. The amount left after these deductions determines whether the sale can clear the secured debt. If the proceeds may not be enough, raise this immediately with the lender and your conveyancer rather than assuming the buyer can complete without further approval.

Use a solicitor or licensed conveyancer who understands mortgage arrears and ask them to review the buyer’s proposed contract. They can check the title, identify restrictions, request the lender’s current redemption statement and confirm what must happen before completion. If the lender will not be repaid in full, the lender may need to approve the sale and agree how any remaining balance will be handled. A separate debt adviser may also help you understand the consequences of any shortfall.

Before accepting an offer, ask practical questions such as:

• What documents are required from you?
• Will the property be inspected, and can the offer change after inspection?
• What happens if the lender’s redemption figure is higher than expected?
• Who pays the legal and administrative costs?
• Can you review the contract before signing?
• What happens if the proposed completion date cannot be met?
• Will the buyer require vacant possession or agree to an existing tenancy?

Check the identity and authority of the purchaser, read all paperwork carefully and be cautious about signing documents that transfer control of the property before you have taken independent legal advice. Do not pay an unexplained upfront fee or hand over property documents without understanding why they are needed. Your conveyancer should verify the transaction, communicate with the lender and confirm the completion arrangements.

Once the offer is accepted, the process generally involves supplying identification and property information, completing the buyer’s enquiries, approving the contract, obtaining up-to-date financial figures and arranging exchange and completion through the conveyancers. The lender’s charge is dealt with as part of completion, and the sale proceeds are then distributed according to the agreed legal and financial requirements. Keep copies of the offer, contract, lender correspondence and completion statement so you can check how the proceeds were applied.

If you have received a possession notice or court paperwork, tell the cash buyer and your solicitor at the outset. Selling is not an automatic suspension of repossession action, and only the lender or court process can confirm what steps are required. Continuing to communicate with the lender while the sale is assessed can help prevent missed requirements and ensure that any proposed transaction is considered against the relevant deadlines.