First time buyer - all cash, any benefit?

newbie84

Hi All

It is time to buy my first house/flat. I was wondering, I have enough to buy in cash, is there any benefit as a buyer to buying all in cash? I mean, would you potentially get a better deal with seller if you paid with cash, compared to if you got a mortgage?

I presumed that the seller would get money either way but I saw on a programme someone making an all cash offer, and it got me thinking

marksoton

As a vendor i wouldn't care where your funds came from, and i certainly wouldn't discount because you're a cash buyer. I'm not a used car dealer!

However in some people's eyes it might make you more proceedable.

Bluebirdman_of_Alcathays

I'm with mark - a bank are hardly going to screw me over, I will get my money either way so I wouldn't care. Others will assume that conveyancing may be quicker with a cash buyer, but I can't imagine that many people will care.

newbie84

Bluebirdman_of_Alcathays wrote: »

I'm with mark - a bank are hardly going to screw me over, I will get my money either way so I wouldn't care. Others will assume that conveyancing may be quicker with a cash buyer, but I can't imagine that many people will care.

fair enough, I have never bought a house so no idea of the process, but this comment helps clear it up

Bluebirdman_of_Alcathays

newbie84 wrote: »

fair enough, I have never bought a house so no idea of the process, but this comment helps clear it up

I mean, don't take my word for it - there are no hard and fast rules when it comes to buying a house. It's not like the stock market, where there are so many buyers and sellers that if x many people do y then z will happen to the price. When buying a property, there are usually very few buyers and sellers in a particular local market - you may well find a seller who really really wants a cash buyer!

AnotherJoe

I bought once as a cash buyer, i was up against someone with a mortgage, they picked me because there was no chance of a mortgage offer being declined and less paperwork. I still paid the market rate.
It also depends on the circumstances of the seller. If they dont want a quick sale (maybe the havent found soemwhere to go to yet), then a cash buyer isn't of much interest, if they are in a chain, a cash buyer adds a bit more certainty, there's a bit less to go wrong and of course if they want or need a quick sale they may take a low offer from a cash buyer they wouldn't from someone who needs to borrrow since teh borrower may not come through on time.

When i bought i didn't do searches, i didn't have a survey, so it went as quickly as it could.

rosyw

You might get lucky like I did! I bought a virtually new build very cheaply, had been a self build by a local builder for himself but he'd gone bust just as he got building regs sign off and there was no NHBC warranty, so - cash buyers only and he was desperate for the money :T

G_M

Yes it means you can go for properties that are advertised as 'cash buyers only'.

Trouble is there is a reason for 'cash buyers only'. It means it is unmortgageable so

a) has something pretty badly wrong with it, and
b) unless you fix whatever was wrong, you'll have trouble selling in the future as you'll have to find a cash buyer.

DanJKelly

Aside from the hundreds of thousands of pounds you will save in interest over the years by not having a pay a mortgage?!!!

newbie84

DanJKelly wrote: »

Aside from the hundreds of thousands of pounds you will save in interest over the years by not having a pay a mortgage?!!!

I was secretly hoping an all cash buyer might have some small benefits like being able to get a better deal with the price

eddddy

Sellers sometimes prefer cash buyers because:

- Transactions can be quicker, because you don't have to wait for a mortgage offer (but that only helps if the seller wants a quick sale).

- Mortgage applications can sometimes fail (e.g. because the applicant 'forgot' to mention all their debts).

- Cash buyers don't always have surveys - so problems may not be spotted.

So a seller might accept a slightly lower offer from you, or choose you over another buyer who needs a mortgage.


As a cash buyer, you can buy an unmortgagable property if you want. If you know what you're doing, you might be able to make a profit that way. If you don't know what you're doing, it could be a disaster.