Cash Buyers only!!

london.cidade

Hello,

what is it all about ? does it mean that property has legal problems ? what I find it difficult to understand is, if a property isn't eligible for the mortgage , most probably will not be eligible in terms of legal as well ?. should I avoid all "cash buyers" only ads ?

edit: I don't need a mortgage but if a property is unmortgageable if banks are not taking the risk whatever it is, should I take the risk ? and why does a property just become unmortgageable ?

thank you

Hoploz

It means for whatever reason it's not mortgageable.

Could be short lease, could be in derelict condition ....

Do you need a mortgage? If so, yes ignore them. If not, you might pick up a bargain but chances are it's for a reason.

HouseBuyer77

what I find it difficult to understand is, if a property isn't eligible for the mortgage , most probably will not be eligible in terms of legal as well

Other than 'vendor owns property' I don't think there are any legal requirements for selling a property (and even then you can sell a property you might own, but actually don't, in the case of unregistered land without decent records).

Generally 'cash buyers only' means you won't get a mortgage on it and that could be for any number of reasons. Though could mean the vendor just wants to deal with cash buyers for whatever reason, but this is unlikely.

G_M

cash buyers only usually means either unmortgageable, or without vacant possession (tenants or someone else living there who will not be leaving).

what I find it difficult to understand is, if a property isn't eligible for the mortgage , most probably will not be eligible in terms of legal as well ?

Nothing illegal about selling a property that is unmortguageable. Or tenanted.

. should I avoid all "cash buyers" only ads ?

If you need a mortgage, and/or want to live there, then yes.

If you have cash, and/or want to buy it as an investment rather than to live there, then no.

davidmcn

G_M wrote: »

If you need a mortgage, and/or want to live there, then yes.

Or if you want to be able to sell to someone who needs a mortgage. Or if you want to be able to mortgage it yourself in the future.

walwyn1978

The usual ones:
Unmortgagable - not all companies lend on all properties, sitting tenants, short lease, unusual construction, lot of renovation work needed (some mortgage companies won't lend if no kitchen/bathroom)

london.cidade

HouseBuyer77 wrote: »

Generally 'cash buyers only' means you won't get a mortgage on it and that could be for any number of reasons. Though could mean the vendor just wants to deal with cash buyers for whatever reason, but this is unlikely.

Hoploz wrote: »

It means for whatever reason it's not mortgageable.

Could be short lease, could be in derelict condition ....

Do you need a mortgage? If so, yes ignore them. If not, you might pick up a bargain but chances are it's for a reason.

I don't need a mortgage but if a property is unmortgageable if banks are not taking the risk whatever it is, should I take the risk ? and why does a property just become unmortgageable ?

eddddy

london.cidade wrote: »

I don't need a mortgage but if a property is unmortgageable if banks are not taking the risk whatever it is, should I take the risk ? and why does a property just become unmortgageable ?

Ask the EA. (Or provide more details about the property, or a link.) There are too many potential reasons to guess.

But here are somebody else's 11 suggestions of things that might make a property unmortgageable: http://www.propertytribes.com/11-scenarios-that-make-a-property-unmortgageable-t-9544.html

G_M

london.cidade wrote: »

I don't need a mortgage but if a property is unmortgageable if banks are not taking the risk whatever it is, should I take the risk ? and why does a property just become unmortgageable ?

You need to find out why it is unmortgageable.

For example, if there is no kitchen, it will be unmortgageable.

So you buy it for cash, put in a kitchen, and bingo! No problem selling to a buyer with a mortgage.

There is a tenant. You buy it for cash, You wait for the tenancy to end (assuming it does.....), and then either move in or sell it with vacant possession to a buyer with a mortgage.

Without knowing the details it's impossible to aswer definitively.

HouseBuyer77

if banks are not taking the risk whatever it is, should I take the risk ?

Well first step would be to work out why it's unmortgageable. Banks are very risk averse when it comes to mortgages. They don't make huge amounts of money on each mortgage and any repossession that doesn't result in a saleable house could easily wipe out the profit from many more. So things they wouldn't touch with a barge pole may be perfectly reasonable things to buy that aren't super risky, provided you know what you're doing.

and why does a property just become unmortgageable ?

Could be a huge number of reasons, large structural issues or legal issues are common ones. You can't mortgage a house that doesn't have a kitchen or bathroom. A perfectly good property that's just had the kitchen and bathroom ripped out would be unmortgageable.

cash buyers only usually means either unmortgageable, or without vacant possession (tenants or someone else living there who will not be leaving).

I think EA's tend to use 'Investment buyers only' when there's a tenant and the vendor wants to sell with them still in possession, given you can still buy such a property using a BTL mortgage. Though maybe if the tenant has an AT rather than an AST you can't get a BTL mortgage?

Cardinal-Red

The house next door to us was cash buyers only because it was basically "unfit for human habitation" and so no mortgage was possible.

This was because the previous owners had basically stripped everything of the home.... I do mean everything! Light switches, handles on fixed cupboards, the entire kitchen etc.

The buyer thinks he got an incredible bargain as he was in a position to pay cash, then renovate. It's not always a warning sign.