Any advantages in buying a property for cash?

zaksmum

My cousin has had an inheritance and wants to buy a house outright for cash, around £200K.

Her current place will have to be sold cheaply (about £85K which is 20% less than sold prices in the area) to get rid of it as it's in a bad area.

She is trying to buy before selling her house, thus avoiding any chain.

However she's expecting some discount on asking prices as a cash buyer but it doesn't seem to matter to vendors. Cash offers of £180K on properties priced at around £195K-£200K are being rejected.

Is she expecting the impossible wanting a 10% discount for cash?

ConfusedofYorkshire

i would imagine it depends largely on the area.
In London being a cash buyer will almost certainly not get you 10% off the asking price.

But find the right house with a keen seller and a buyer's market and yes it can make a difference. Its mainly the fact that she isn't a chain and doesn't have to sort out a mortgage that makes her an attractice prospect, compared to someone in a long chain.

I_have_spoken

Is she expecting the impossible wanting a 10% discount for cash?

Well, she won't be getting top billing from the EA on commission. TBH, it's more about being proceedable than having cash. I'd guess a £200k property isn't FTB territory, so seller may be in a chain with their vendor anyway.

Unless she can find a seller who wants out quickly (or a probate sale), folks may prefer to hang on expecting the market to come up from Easter.

cattie

I was a cash buyer when buying my current place but certainly never expected (or got) a discount because of this. It just makes you a bit more of an attractive prospect to vendors who would prefer not to be caught up in a big chain situation.

Because of this, often if there are 2 similar offers, one no chain the other in a chain , then the no chain offer will win out. It also works in your favour sometimes if a slightly higher offer than yours is put in by somebody with a property to sell or in a chain, vendors will often choose the cash/no chain purchaser even if they accept a slightly lower figure because there is less chance of complications occurring.

zaksmum

Looks like she's chasing rainbows then.

So she should try more for a 5% discount rather than 10%? Or just expect to pay the asking price?

The area of England is the North West.

ian103

we've been a cash buyer twice, first time was no real benefit, second time was - we drove a fair deal on the price rather than the pointless asking price but the people wanted someone who was procedable as the house was empty and due to the mess their tenants had left would have required some work to relet and I think the estate agents saw the benefit of their fees on a quick sale rather that what in reality is a small amount of additional fee many months later.

CLAPTON

zaksmum wrote: »

My cousin has had an inheritance and wants to buy a house outright for cash, around £200K.

Her current place will have to be sold cheaply (about £85K which is 20% less than sold prices in the area) to get rid of it as it's in a bad area.

She is trying to buy before selling her house, thus avoiding any chain.

However she's expecting some discount on asking prices as a cash buyer but it doesn't seem to matter to vendors. Cash offers of £180K on properties priced at around £195K-£200K are being rejected.

Is she expecting the impossible wanting a 10% discount for cash?

in general mortages aren't a problem but being part of a chain is

if she wants the best price then better to sell her own place and move into rented and then she will be a cash buyer with no chain

Prothet_of_Doom

In my humble opinion, find the dream house you want, make a reasonable offer, and wait whilst the vendor messes around looking for somewhere to live.

The only place it's of any value being a cash buyer is at auction. Buy something that needs £60K spending on it that is unmortgagable, and use the £85K from the sale of their own house to fund the work. Remember that a house won't be insured if left empty for more than 3 months.

AdrianC

zaksmum wrote: »

Is she expecting the impossible wanting a 10% discount for cash?

Yes, imho.

Sorting out financing is the buyer's problem, and the EA _should_ have made sure that it's not an issue. The vendor gets the same amount of money on the same date, no matter how the buyer sources that money.

Being a cash buyer, no chain, will make her a more attractive purchaser, sure - but it's the chainlessness that'll make the bigger difference.

DRP

no real difference between ftb and cash buyer, as long as the finances are ok.

No chain could make a difference though.

societys_child

Agree with the previous couple of posts.

Cash buyer or mortgaged buyer makes very little difference to the vendor.

Completion takes place when the funds are transferred. The seller isn't getting a wad in a brown envelope that he can stick in his back pocket and keep quiet about.

A cash buyer has less outlay, no mortgage fees etc, doesn't have to have a survey, so can change their mind and walk away at the last minute if they wish, with very little outlay.