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

slicendice

Hi everyone
Sorry if this is a really stupid and/or obvious question, but can anyone tell me what it means when a house is being sold and it states in the advert "cash offers only"?

At absolute face value, it almost sounds like they don't want anyone who's going to have to get a mortgage and only want bids from buyers who can turn up with a massive suitcase full of £20 notes - but surely it can't mean that? Does it really mean you need to have that much money in your bank account?

Or does it just mean that normal mortgages are OK and it's just that they don't want any weird financial offers/situations (e.g. I'll offer you £[asking price - 40%] plus this lovely shed and a slightly used Vauxhall Vectra)?

The price being asked does seem quite cheap given the size of the house and the area it's in (i.e. it's a good sized house in a nice area)...should the "cash only" thing ring alarm bells?

Thanks very much!

Angela_D_3

Unmortgagable basically, it's in such bad condition the banks will not lend you money to buy it.

poppysarah

Or it's been sold recently (More lenders aren't lending on propertys sold in the last 6 months)

kingstreet

Yep. Likely to be unmortgageable so they are looking for buyers who won't need one, not necessarily someone with a suitcase full of used twenties.

TOBRUK

Isn't it sometimes that asking 'cash buyers only' mean that they don't want anyone who are looking with any property to sell, no chain etc so that the sale can go through quickly?

mlz1413

Yep unmortgagable, ie you need cash to buy it as no one will lend you the money.

the house may have structrual problems or covenants that make it undesirable. EA will sometimes say why its cash only ie sitting tenants.

Seanymph

TOBRUK wrote: »

Isn't it sometimes that asking 'cash buyers only' mean that they don't want anyone who are looking with any property to sell, no chain etc so that the sale can go through quickly?

Nope - you can be a cash buyer in a chain - it just means you have a big suitcae full of £20's - or a house of higher value to sell if you are downsizing.

slicendice

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?

Seanymph

It could be non traditional construction - or suffered subsidence - or something else that you can't see.

ClareyFairy

agree with the above poster, it is often that the house is non standard construction. This applies to lots of homes built after the war. They werent built to last and therefore are often unmorgageable. hth

kingstreet

If it appears outwardly fine, I would imagine the issue is the land it's built on. Is it in a former mining area? Is it in an area with problems with subsidence or soil shrinkage?

Inability to insure it could make it unmortgageable, so has anything been done to make that a problem?

How long's it been on the market? Is it in an auction?