Misled by estate agent over 'Cash buyer'?

Chopsie&Chelvis

We accepted an offer on our house late last week - slightly lower than we were hoping for and it means borrowing at a worse rate which we don't really want, but the estate agent explained they were cash buyers and keen to move, so we decided to accept as we would like to move quickly.

We decided on a house this weekend, not made an offer yet as it's a repossession, so I wanted to get everything straight with our buyers first as I've heard that they expect you to get on with everything quickly with a repo. So I called the estate agents on Mon to ask them to speak to our buyers, see when they had planned with a survey.

Estate agent called back - they're not ready to move yet as they have a problem with selling their property - a holiday home. The estate agent insists that they are cash buyers, because when they sell their property, they'll have the cash not a mortgage to buy the house. I thought a cash buyer was someone who literally had the cash in their bank account, ready to go, no need to sell anything or get a mortgage approved.

I am pretty annoyed as we accepted a lower offer based on our definition of 'cash buyer'. Am I right to be annoyed? Is my understanding of 'cash buyer' wrong? Estate agent's response is to bluster away that 'he can only apologise' and 'my colleague shouldn't have told you that'.

Just to complicate this, he has called this afternoon to suggest reducing the price to the lower offer we accepted as he's 'absolutely sure' we would get another offer at the lower price (he was also absolutely sure at the higher price, so I don't trust that much).

Is there much I can do about this? Everyone is telling me to change agent, but we would still have to pay for the 'premium' marketing pack we agreed to more fool me!

Grimbal

the would-be buyers of the house we ended up buying described themselves as exactly the same: they were cash buyers, but dependent on a sale. AFAIK, cash buyers can just mean that they wont need to obtain a mortgage for their onward purchase

lessonlearned

I think you were misled.

Keep this offer on the back burner, but carry on marketing your property.

First come, first served.

If the next interested party can proceed more quickly then go with them.

I wouldn't lower the price either.

Your agent is working for you, not the purchasers.

Fire_Fox

I wouldn't call that a cash buyer either but you have only lost a week. If you are in a chain you are not in a position to buy a repossession, you can be gazumped right up to exchange on those.

ReadingTim

Sadly your understanding is incorrect, or at least incomplete:

The buyer is a cash buyer, as they are not dependant on a mortgage to fund the purchase of your property.

However, they are not chain free, as they are dependent on selling their present property to fund the purchase of yours.

While these two features often go hand in hand, this isn't always the case, as you have found out. Whether your EA appreciated the difference (and therefore mislead you) isn't that relevant, especially if you didn't clarify whether your understanding of 'cash buyer' matched theirs.

G_M

You cannot buy at auction unless you have the funds, in cash or firm mortgage offer (not MIP) to do so.

With a repo, a similar principal applies though not quite as rigidly. Althought the bank will expect a fast sale, you will not be legally commited in the same way as at an auction.

But basically, I wouldn;t even look at a repo is I was dependant on a sale for the purchase price.

'Cash buyer'? No rigid definition. In each case, you have to ask what it means:
* buyer does not need a mortage
* buyer does not need to sell
* both of the above

Same as 'First Time Buyer'. It has one definition for HMRC (stamp duty) purposes but may be defined totally differently by a mortgage lender, or estate agent.

propertyman

We bought a flat in August with cash ( letter from the bank confirming our funds held to do so) and still monkey brained EA insisted that we must see their mortgage broker and financial advisor.....

Couldn't answer a simple " this is real, not borrowed, money, so why?"

So.........

Mr EA you have got us to agree to a sale to someone who is unable to proceed by failing to, at best, clearly explain their circumstance, or at worst , misleading us.

I paid for the premium pack but didn't get premium or even competent service-
have one of your partners or directors call me about the fees due as I am looking for a refund of that pack cost, and re market, now.

This is likely a typical case of putting a purchaser's foot in the door and hoping it will play out.

Chopsie&Chelvis

G_M wrote: »

'Cash buyer'? No rigid definition. In each case, you have to ask what it means:
* buyer does not need a mortage
* buyer does not need to sell
* both of the above

Same as 'First Time Buyer'. It has one definition for HMRC (stamp duty) purposes but may be defined totally differently by a mortgage lender, or estate agent.

I suppose that's what it come down to, I have to clarify everything and not trust that we mean the same things.

regarding the repo, it's not at auction, it's with an estate agent who told us that being in a chain, whilst not as good as being a cash buyer or us having a cash buyer, wouldn't be a problem and to get back to her when we had another buyer/survey booked etc. Is this untrue too? :eek: I'm trying not to refer to all the sterotypes of estate agents, but I'm increasingly seeing why people think them a certain way ....

G_M

Chopsie&Chelvis wrote: »

... it's with an estate agent who told us that being in a chain, whilst not as good as being a cash buyer or us having a cash buyer, wouldn't be a problem and to get back to her when we had another buyer/survey booked etc. Is this untrue too? ....

Unusual certainly.

Typically banks who've repossessed want to get shot of the property.

So typically they insist on Completion within 28 days (though in reality this is not enforced since a further 7 day delay is better than the bank starting again with a new buyer).

And also typically, until the contract is Exchanged the bank will leave theproperty on the market and WILL accept other offers if they are higher/faster etc.

My guess is that the EA saying " wouldn't be a problem and to get back to her when we had another buyer/survey booked etc." actually means

"we are going to keeplooking for a buyer for this property, and will sell it if we can, but by all means come back to us in 3 months and IF it is still available we'll be happy tolook at your offer at that time!