Cash purchaser - advantages?

ericonabike

I hope shortly to buy a second property locally, using a mortgage raised on my [previously mortgage-free] house. I will therefore be a cash purchaser, which I would hope gives some advantage. But presumably I will still need to appoint a solicitor for the purchase, which will hold things up to the same extent as any other buyer? Therefore am now unsure if I do actually have a better negotiating hand than any other buyer, as the kind of property I am looking at is FTB territory, who would not be in a chain anyway.

I had a mental image of simply handing over a cheque for £xx and waiting for it to clear...

PasturesNew

A cash buyer has advantages of speed and decision.

A cash buyer decides how much they'll pay for a house, there's no lender saying it's overpriced and not lending them enough.

A cash buyer doesn't have to apply for a mortgage, wait for the mortgage company to appoint a surveyor, then wait for a formal mortgage offer (or not).

You choose to buy the house at a price you're prepared to pay. You don't have to have a survey done if you don't want to. You don't have to wait for mortgage offers and the solicitor to go through the mortgage offer paperwork as part of their work to do.

Handing over a cheque .... would never happen. The ownership of the property has to be checked, any existing mortgage on it (and loans) have to be paid off to the companies holding any charge on the property. The property has to be properly transferred to your name.

If you handed over a cheque how would you know that they weren't just tenants renting it? So, no, it doesn't work like that.

Or, what if there were odd things in the deeds.... strange covenants. What if it turned out to be leasehold with only 5 years left? All this needs checking before it's sold to you. You might not want to spend £100k on a house you can only sleep in 3 nights of the year and which ceases to be yours in 5 years.

poppysarah

Bizarre... so you are going to use your house as a cash machine. I thought they'd outlawed that after the credit crunched.

How will you pay the mortgage on your existing house?

VIGILANT22

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Quote: Not sure there's much of a rat to smell? The mortgage is being taken out solely to fund the purchase of another property, which we are renting out. The rental agreement with our son will be a commercial one, but presumably it is up to us how much rent we charge? Also, I would hope that there is no need to declare on a tax return the name of the tenant from whom we receive income, as this would seem something of an invasion of privacy. But I speak from a position of little knowledge at present and would welcome other views.

I hope you have declared on the motgage application that this is to be rented by family.........

ericonabike

Apologies for slow reponse - away for weekend. Pastures New - fair points, thank you. PoppySarah - I will pay the mortgage on my existing house in the same way as I did my previous one - from my wages. I would regards it as security for the building society, rather than a cash machine, but there you go. Vigilant22 - as I am remortgaging my own house, the BS was pretty indifferent as to what I wanted to use the money for. Which is as it should be IMO - I can afford it, they get the house as security, what's it to them what I do with the money? As it happens I did tell them what it was to be used for, and they were entirely uninterested.

VIGILANT22

I do not believe somone who is lending you money is "entirely uninterested" on what their money is being used for..........

ericonabike

Their words were something along the lines of 'that's one way of getting him out of the family home'. Sounded pretty uninterested to me...

VIGILANT22

ericonabike wrote: »

Their words were something along the lines of 'that's one way of getting him out of the family home'. Sounded pretty uninterested to me...

rolls eyes...this says it all really!......Quote ericonabike : I had a mental image of simply handing over a cheque for £xx

poppysarah

I guess if you don't pay the mortgage they can come after you and your assets - get two houses for the price of one.