Isn't everyone a cash buyer?

joeypesci

This discussion came up. Looking to buy a place and am a first time buyer with no chain. Have a decent deposit but need to get a mortgage. On a couple of places I've put offers in, "cash buyers" have come and taken it from me

I mentioned this to someone who said

"You are a cash buyer"

I said "But I need to get a mortgage"

They said
"But when you get the mortgage you have the cash so are a cash buyer. The cash buyer term is rubbish. As long as you can get a mortgage then everyone is a cash buyer".

Is it naughty to now start saying to agents when they say "Sorry but someone has offered more than the asking price and they are a cash buyer". To say "OK I up my offer and I'm also a cash buyer". I suspect lots of the so called "cash buyers" aren't and maybe stuck in chains. Once they sell their chain they then become a "cash buyer" but, as with us all, are just saying "cash buyer" in the hope the property then gets taken off the market giving them time to actually get the cash.

JoJo1978

When you make an offer for a house and identify yourself as a cash buyer usually the EA and then the solicitors will check your status.

We were cash buyers i.e. we had our own funds in the bank to buy our new house outright without needing to sell our existing home. The EA didn't ask to see proof although we were prepared to show our solicitor.

As it turned out we decided that we wanted to keep that money in the bank and fund the purchase from the sale (almost.) At that point the EA wanted us to show proof of what the offer made on our house was and our solicitor asked us to show evidence we could find the difference. So we then became cash buyers reliant on sale.

Whether it's right or not to do what you suggest is up to you to decide but your 'advantage' may disappear when your solicitor reveals to the other side that you are reliant on a mortgage.

Dorian1958

IMO you are only a cash buyer if you don't need a mortgage and you don't have a property to sell. This might be attractive to a vendor as it means the cash buyer does not have to hang around waiting for mortgage approval and isn't stuck in a chain therefore both parties can move quickly to completion. If you claim to be a cash buyer, have your offer accepted and then say "oh hang about while I get my cash from my house sale" you run the risk of having the vendor pull out. At the end of the day, the price paid will be the deciding factor as to what is acceptable to the vendor, in the majority of cases.

Slithery

Unfortunately the term 'cash buyer' doesn't have a legal definition, different people use it to mean different things.

Some people use to to mean they're not in a chain, but need a mortgage, whereas others use it to mean that they have the readies sitting in their bank.

PokerPlayer111

Cash buyers do not have to do survey, no searches needed unless they want, no waiting around for banks on anything at any point.

eddddy

joeypesci wrote: »

They said
"But when you get the mortgage you have the cash so are a cash buyer. The cash buyer term is rubbish. As long as you can get a mortgage then everyone is a cash buyer".

Has that person ever bought a property - and did they use that strategy?

If you say that you are a "cash buyer" most EAs will ask to see bank statements to prove that you have the full cash amount.

If you're unable to produce those bank statements, the EA is likely to think you're a timewaster.

I'd say it's probably better to honest, and say that you are an FTB and you need a mortgage.

Cakeguts

If you are competing with cash buyers you are not offering high enough on the properties you are buying.

Cash buyers sometime get discounts because they can buy the house faster. They don't need to go through the mortgage application process or to have the house surveyed for the benefit of the lender. A cash buyer is someone who has the whole of the money in the bank ready to pay for the house. They don't need to sell a house to get it the money is already in their bank account. They don't need to borrow any money. They are useful because they break chains.

G_M

For goodness sakes! Talk about pointless semantics!

Words only ever have meaning in terms of their usage.

So far as the term 'cash buyer' is concerned, within the context of property purchases, it has two very generally understood meanings: Either

a) someone who does not need to borrow ie via a mortgage in order to obtain the required cash, and/or
b) someone who does not need to sell a property they already own in order to obtain the required cash

Describing yourself as a cash buyer at an early stage if you need to do a) or b) above is deliberatey misleading, and when it comes to light (as it will) is going to seriously annoy all other parties involved.

By all means go out of your way to annoy, if that's what you want, but don't try to justify your actions (to yourself or others) with semantic arguments.

seven-day-weekend

We were cash buyers as we had the money in the bank and were not in a chain. We could have paid in cash the following day if necessary.

I think if you need a mortgage you are not a cash buyer as you have to hang around waiting for the mortgage to go through.

Do not describe yourself as a cash buyer in this situation as all you will do is alienate your sellers.

SG27

Cash buyer means you dont need a mortgage.

vacheron

The term "cash buyer" suggests lower potential risks and time-frames to the seller (and therefore their EA) because the buyer is far less dependent on third parties not to disrupt their buying process.

No house to sell wipes out their buyer / solicitor / /chain / EA risks, not needing a mortgage free wipes out funding / affordability / survey issues.

In my world, "Chain Free" is already available to use when you don't have a property to sell. Cash Buyer means that you have all sufficient liquid funds to cover the entire purchase at the time you call yourselves a cash buyer.

If I were the seller or an EA I'd be a bit annoyed if someone called themselves a cash buyer when they were in actuality simply "chain free" but still required a mortgage.