What does "cash offers only" mean when buying a house?

westernpromise · 18 April 2011 at 12:50PM

You have to wonder why sellers stipulate this. It can only have the effect of reducing the size of the buyer pool, which in turn is going to reduce the number of bids made, one of which might have been the highest.

kingstreet · 18 April 2011 at 12:54PM

westernpromise wrote: »

You have to wonder why sellers stipulate this. It can only have the effect of reducing the size of the buyer pool, which in turn is going to reduce the number of bids made, one of which might have been the highest.

I'd say this level of honesty is both refreshing and useful. If previous purchasers have tried to buy using a mortgage and have been unable to do so, it seems churlish to keep schtum and allow more and more people to waste money knowing full well they are likely to have the same result.

In addition, the vendor and the agent would be continually wasting their own time. Realistic and pragmatic approach IMHO.

Jenniefour · 18 April 2011 at 12:59PM

Could be someone running out of money and trying to get a very quick sale. Or someone who prefers not be hanging on wondering if their buyer will actaully get their mortgage approved - so many sales are dropping through because some don't appreciate how much tighter mortage lending conditions have become. Or it's not possible to get a mortgage on it at all for some reason. I would be getting back to the agents - if you're interested in it - and find out what's going on.

mlz1413 · 18 April 2011 at 1:12PM

slicendice wrote: »

Thanks for all the responses everyone - much appreciated.

The house itself appears to be in very good condition - obviously that's just from outward appearance at this stage so accept that there may be "unseen" issues. The inside has recently been refurbished and looks to be in extremely good condition, and certainly doesn't appear to be uninhabitable or in such a bad condition that it wouldn't be possible to get a mortgage on it.

I'm wondering if it's more the possibility specified by poppysarah and it's recently been bought and renovated....and maybe the renovator's run out of money?

What's the situation in terms of bidding on a property like this? Might it be possible to negotiate more than usual?

Give the agent a ring and ask if its cash buyers or no chain buyers and why they have put that in the advert.

if the house is unmortgageable then negotiations could well be in the buyers favour, but if 2 buyers are interested then there is less chance of a bargin.

if the house has been done up and the investor is selling because its finished, then they may just want a quick sale to avoid a falling market and interest rates rise.

if its because the investor has run out of money then it depends how much hasn't been done and if its being sold by the investor or by the mortgage company.

2bFrank · 18 April 2011 at 1:24PM

I would defo find out what is going on before you even dream of trying to buy the house.

Banks will give out mortgages for most houses, even non standard. The issue is usually to do with insurance. If insurance companies will not insure a house (due to construction, damage etc) then your chances of a mortgage is virtually nil. Plus if you carnt get insurance, your risking all that money on a pile of bricks, that is very likely to fall down soon.

There are some speciality insurance companies that will insure some dodgy houses, and if you can find the insurance, you are more likely to find a mortgage company that will lend to you. However this would be a nightmare, I would hope the price reduction is really worth the effort.

Jaynne · 18 April 2011 at 1:29PM

Have you asked the estate agent? One two minute call should sort it out?

When I saw the post I thought it meant someone without a chain only but other explanations of it being unmortgageable are also reasonable.

As to honesty, well they probably don't want to waste their time because if its unmortgageable then this would be picked up in the survey and the sale would fall through.

slicendice · 18 April 2011 at 3:08PM

Sorry, one other thing I should have mentioned - the ad originally stated that all offers should be submitted by 31st March. Obviously that date has come and gone and it's still on the market.

I don't know if that time deadline would indicate the presence of a renovator who's run out of money, and hence the need for a quick sale...?

jackomdj · 18 April 2011 at 7:25PM

My old house was unmortgageable. I bought it with a mortgage, later the mortgage co's introduced a compulsary test for concrete cancer for houses in our area of a certain age & my house had it.

We got fed up with the estate agents sending people round that would offer but be ubable to get a mortgage! In the end we sold to a structural engineer but told them they had to complete by a certain date (within four weeks) otherwise it was going to the auction it was already booked into.

eschaton · 18 April 2011 at 7:56PM

There's really a simple choice here.....

1. Phone the estate agent and get a definite answer in a few minutes.

2. Come onto this forum and ask a bunch of strangers that can guess all day but really don't know the answer.

You decide

slicendice · 19 April 2011 at 7:36AM

eschaton wrote: »

There's really a simple choice here.....

1. Phone the estate agent and get a definite answer in a few minutes.

2. Come onto this forum and ask a bunch of strangers that can guess all day but really don't know the answer.

You decide

I wanted to do a little research before contacting the estate agent so I would at least have a rough idea what I was talking about. Always better to go into these things a little prepared than completely blind....at least, that's my feeling.

Thanks anyway

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What does "cash offers only" mean when buying a house?

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