Cash buyer discount

Catatonia

How much discount would you give off your house to a cash buyer? I know it will depend on how quickly people want/ need to sell, but just wondering if there's a vague average.

If I bought a property under a certain value I could pay cash, but over that I'd need a mortgage, so just wondering what sort of offers I could put in on the ones I could by for cash; I obviously want to pay as little as possible, but don't want to annoy sellers.

If the average person will let their property sell at 10% off the asking price, what would be the further discount for cash? Or would most people not discount further unless they had a real need to sell?

poppysarah

How keen are you to sell?
Are they a landlord? Or a real person planning to live in it? I'd be more tempted to give more discount to a real person.

How many other offers have you got on the table? What have they offered? How long has house been for sale?

Catatonia

I am a real person. And yes, it would be for a family home (currently renting).

Thanks for the questions, they are useful things to think about.

poppysarah

When you make an offer make it clear it's a cash offer and you're not going to bother with a survey/pull out etc and you want fast completiion/ are flexible on completion date etc.

But make a low offer. It's a tough world out there at the moment.

Catatonia

Thanks. I would still want to do a survey though, as it would be an old property.

So on a £200k property that's been on since early autumn, I would probably normally start offers at about £170/£175k (2 houses on the street have sold in the last few months, one for £175k and one for £195k). How low should I start with a cash offer?

hazyjo

Would it make a lot of difference to most sellers? They don't actually save anything by selling to cash buyers, do they? Or maybe I'm missing something. They wouldn't have the risk of the buyers not being able to get a mortgage, and they would know that funds were in place, etc. I remember when I sold a house before. I was offered a ridiculous price by a very pushy viewer (basically trying to bully me in my own house when I was on my own). He kept saying he was a cash buyer and all I said was it made no difference to me and that any offers needed to go through the EA. He wouldn't listen at all and was there for around 30 mins (with his wife). I was livid. The house sold for way more than he was offering. Market wasn't even that bad then. I ended up telling the EA I wouldn't deal with him in a million years even if he paid over the asking price. Grrrrr.

Jx

Catatonia

hazyjo wrote: »

Would it make a lot of difference to most sellers?

I don't know, so I'd be interested in a range of opinions. I probably would have given a discount to a cash buyer on my sale not to have the hassle of someone's mortgage falling through, and to get a quicker sale, but I don't know if that's the norm.

poppysarah

Catatonia wrote: »

Thanks. I would still want to do a survey though, as it would be an old property.

So on a £200k property that's been on since early autumn, I would probably normally start offers at about £170/£175k (2 houses on the street have sold in the last few months, one for £175k and one for £195k). How low should I start with a cash offer?

You want to know it's not falling down - yeah that's fine. A full survey will scare the bejesus out of you.

Speak to surveyor before and after survey.

N79

hazyjo wrote: »

Would it make a lot of difference to most sellers?

I guess its situational.

Cash buyers have no chain so they can anchor chains without a long string back to a FTB. This can be important for larger properties in the current market as it allows people to move!

If it is a FTB type property then there is probably little advantage to many sellers other than the shortening of the time and the increase in flexibility.

For example, I am always a "cash" buyer and my standard terms are "exchange within 3 weeks, complete at the buyers convenience within 9 months". This then allows the seller to be a "no chain" buyer themselves, with the certainty of their sale, thus allowing them to negotiate on upwards. Such terms would not be possible if (normal) mortgages are involved.

SandC

I wouldn't offer any discounted price to a cash buyer. My house would be priced at the right level regardless - if I wanted a quick sale it would be marketed and priced accordingly etc. See I would still have to pay for estate agent and legal fees regardless so why give a discount to anyone?

I suppose the only situation I would is if I didn't have a mortgage and wasn't buying another property or was maybe downsizing (ie wanted the cash).

poppysarah

N79 wrote: »

I guess its situational.

For example, I am always a "cash" buyer and my standard terms are "exchange within 3 weeks, complete at the buyers convenience within 9 months". This then allows the seller to be a "no chain" buyer themselves, with the certainty of their sale, thus allowing them to negotiate on upwards. Such terms would not be possible if (normal) mortgages are involved.

Such a vague cmpletion date is what new build buyers off plan often got sucked into doing. It's a risk though as you might be paying more than it's worth - and a mortgage might not be available.

As a cash buyer you'd want to ensure you weren't overpaying for such a generous offer.