"Cash" buyer doesn't have the cash

seven-day-weekend

When we bought our house in Spain we had the money in the bank just waiting for the completion. Upon completion we wrote out a cheque.

That to me is a cash buyer. Not someone who has to wait to borrow money. If they were going to remortgage, they should have done it before so that they had the money waiting.

littlesos

Cardiffborn wrote: »

I wonder if someone could advise me please.

I agreed a reduction in the price of a sale as it was a "cash" buyer who wanted to be quick. The estate agent is a member of NAEA. Surely they should have obtained proof of funds, indeed I was told that until he brought this in they couldn't proceed.

Anyway today I ring my solicitor to chase and I'm told that they are waiting for a mortage offer. I was not very happy so I rang the estate agent who said they would look into this. EA comes back to say oh its a remortage. Why wasn't I told I say. EA says well it looks like its nearly agreed. I am not happy because I should have been told.

Is there anything I can do as they are part of the NAEA?

Fed up to the back teeth of EAs. Think I will buy a tent as its less hassle!!!

Sorry, haven't had time to read whole thread, but this exact thing happened to me.

We lost our sale and had an offer the next day from a "cash" buyer. Things seemed to drag on, and when we chased we found out that not only was she waiting for a mortgage offer, she was also selling her house to her brother, who was also waiting for a mortgage offer.
We rang the estate agents, they said she told them she was a cash buyer, and knew no different.

Luckily for us our previous purchaser had sorted out his problems with his house sale and was more than willing to jump back in with us (having now sold his house and having the money in the bank), so we told the "cash" buyer that she had lied to us, we had needed a v. quick sale and it wasn't going to happen with her. She came around and spent an hour crying on our doorstep. I felt terrible, but we couldn't back down.

RabbitMad

Doozergirl wrote: »

Quoted from the relevant 16b referred to by Pastures New:
"16b Cash Buyer. A ‘cash buyer’ can only be described as such if he has realisable cash assets – that is:

* he has sufficient cash in the bank, building society or other investments, which can be realised in a reasonable time. ie. it will be available by the estimated or proposed exchange of contracts and completion dates.
OR he has actually sold a property – ie, he has exchanged contracts (in Scotland, conclusion of missives) and is expected to achieve completion on his sale before exchange on his purchase – AND he does not require a mortgage to make up any difference in the purchase price of the new property."

A house may be an asset, but it is not a cash asset. He is not a cash buyer!

I would class them as a cash buyer and I think the OEA COP backs me up.

Lets look at this "he has sufficient cash in the bank, building society or other investments, which can be realised in a reasonable time". In this case borrowing against his existing property which should be a formality.

"AND he does not require a mortgage to make up any difference in the purchase price of the new property."
I read this to mean they don't need a mortgage to make up the difference between the money from the asset they are realising and the purchase price, i.e. a mortgage on the property being purchased.
And in this case the person didn't.

Therefore I feel that they can be described as "cash" buyers, however they should have told the EA how they were raising the cash and let the OP know this.

irnbru_2

RabbitMad wrote: »

I would class them as a cash buyer and I think the OEA COP backs me up.

Lets look at this "he has sufficient cash in the bank, building society or other investments, which can be realised in a reasonable time". In this case borrowing against his existing property which should be a formality.

Except the OP states:

Cardiffborn wrote:

Let me explain that I was told by now that the sale would be complete by now and its not and the delay is because of this re-mortgage.

Reasonable time has passed, the purchaser is no longer a cash buyer and any incentive/discount received should be withdrawn.

Doozergirl

A remortgage is a loan, not an asset!

It makes no odds whether they remortgage an existing house or whether they took out a mortgage on the OP's house. The fact is, they have had to borrow money to buy the house! How is that cash? A straight down the line, FTB with a mortgage in principal is almost the same as someone who need to remortgage a house in order to be able to purchase another. Useful that they have no chain, that's all.

It isn't simply a case of drawing the money, neither is it simply a formality because you have to prove that not only does the house provide adequate security for the loan, but that you can afford to pay it back. You go through credit checks and then through the entire conveyancing process again - searches, surveys etc. except on two houses, not just one! That means more opportunity for delays. Remortgages can often bring up issues that weren't deemed important or weren't spotted originally.

It is not like having money in the bank or in shares or whatever. That is your actual money. A remortgage is not - it belongs to someone else.

They are chain free but needing a mortgage of some sort to purchase the property.

The OP has been misled and the EA, I think, is to blame.

hearts

Doozergirl wrote: »

A remortgage is a loan, not an asset!

It makes no odds whether they remortgage an existing house or whether they took out a mortgage on the OP's house. The fact is, they have had to borrow money to buy the house! How is that cash? A straight down the line, FTB with a mortgage in principal is almost the same as someone who need to remortgage a house in order to be able to purchase another. Useful that they have no chain, that's all.

It isn't simply a case of drawing the money, neither is it simply a formality because you have to prove that not only does the house provide adequate security for the loan, but that you can afford to pay it back. You go through credit checks and then through the entire conveyancing process again - searches, surveys etc. except on two houses, not just one! That means more opportunity for delays. Remortgages can often bring up issues that weren't deemed important or weren't spotted originally.

It is not like having money in the bank or in shares or whatever. That is your actual money. A remortgage is not - it belongs to someone else.

They are chain free but needing a mortgage of some sort to purchase the property.

The OP has been misled and the EA, I think, is to blame.

sigh..;-) If say they own the house outright, is this not then an asset?
Why is it not like having money in the bank or shares then?
Money could be in a high interest account requiring notice to withdraw and shares could take time to sell.
A remortgage should be quick and easy to arrange and the cash available in time to purchase. In the OPs case this hasn't happened and this is probably down to the buyers bad timing rather than anything else.
I have always thought of cash buyers as simply, someone who does not have to rasie a mortgage on the property they are buying.

m00m00

Spam!!

again

Lomion

Think where the buyer can proceed without the sale of their own house i.e. no chain, they are usually called Non-Dependent buyers. This can be different from a cash buyer. This could also be a First Time Buyer for example.

As far as I understand it, a Cash Buyer has the funds ready to go in the bank account, and the EA should have asked for proof of this and really should be able to show this proof to you upon request.

A Non-Dependant buyer would not be a cash buyer if their funds are tied up somewhere and need to be released. Maybe a 2nd mortgage or the sale of assets?

The EA should have told you exactly where the buyer stood though :rolleyes:

hearts

Lomion wrote: »

Think where the buyer can proceed without the sale of their own house i.e. no chain, they are usually called Non-Dependent buyers. This can be different from a cash buyer. This could also be a First Time Buyer for example.

As far as I understand it, a Cash Buyer has the funds ready to go in the bank account, and the EA should have asked for proof of this and really should be able to show this proof to you upon request.

A Non-Dependant buyer would not be a cash buyer if their funds are tied up somewhere and need to be released. Maybe a 2nd mortgage or the sale of assets?

The EA should have told you exactly where the buyer stood though :rolleyes:

This sounds right. I stand corrected. ;-)

zekepes

Glad to hear that the EA has finally admitted that they made a 'mistake'. I don't really know what to suggest other than putting it down to bitter experience and badmouthing the EA to everyone you know! I would try, as another member suggested, to get a reduced fee from them.

Someone tried the we have CASH so you should sell your house for less to us thing on the last house I sold. The initally offerered 18K less than the asking (I had offers of the asking and 2K below at the time but neither had offers on their homes), they did bring it up to 6K below the asking but they were such arrogant ***** that anything less than the asking and they could whistle for it - fortunately we were not is any rush and eventually sold it to the 2K below. If I were in the same non-rush postion again then I would tell your buyers where to go and change estate agents but in most cases the moral highground costs us too dearly (I doubt I would ever be in that position again!) which is why the EA's get away with it. This is a warning to us all to check out for ourselves any claims like this.

Hold of to the fact that the NO CHAIN thing is worth more than the cash thing really and look forward to getting into your new home - I hope it is soon!