First Time Seller

AndyTails

What are you on about Exodi?

"Cash buyer", according to some estate agent body that I can't remember, is someone who has the cash in the bank. What many estate agents use it to mean is someone who doesn't need a mortgage, but still needs to sell their current property. I've never heard it to mean someone who doesn't need to sell a property but does need to get a mortgage.

Albala

AndyTails wrote: »

What are you on about Exodi?

"Cash buyer", according to some estate agent body that I can't remember, is someone who has the cash in the bank. What many estate agents use it to mean is someone who doesn't need a mortgage, but still needs to sell their current property. I've never heard it to mean someone who doesn't need to sell a property but does need to get a mortgage.

I have read of the latter definition being used by buyers, who then turn out to need a mortgage.
There seem to be as many definitions of the term as those using the term like to think there are. For me, as a seller, it's 'person(s) who have highly liquid assets readily accessible to that value' (cash, ISAs, that sort of thing, held in such a way as they can be sent to their solicitors for the deposit and final settlement immediately they are required, not anything that will have to be sold, like property, and not access to borrowing, like a mortgage or bridging loan).

Cakeguts

A cash buyer is someone who has all ready got the whole purchase price in a bank or in savings and who doesn't need any loan of any sort to buy a house.



Someone who will have the cash after they have sold a property to get it is not a cash buyer until they have sold the property and got the money in the bank.


Someone who needs a loan of any sort to buy the property is not a cash buyer.



Some people claim to be cash buyers when they aren't because having the cash relies on them selling a property. They only become cash buyers after they have sold the property and they have the money in the bank.



A real cash buyer does not have to get hold of the cash to buy the property because they already have it.

Sibz

Its a how long is a piece of string question.
People saying to get the EA's advice are surely aware that this isn't necessarily ideal.
If they are working on commission then the difference to them price wise would be negligable and if it sells immediately they could save on costs and still get good commission - so that may not be the best place for impartial advice.

The offer may be a starting offer for that bidder they may be prepared to offer more, offers usually come in with the condition that the property be taken off the market. It would be sensible to honour the booked viewings before responding to the current offer. The viewers can be told about the current offer (?) so could help you get the best price.

Exodi

AndyTails wrote: »

What are you on about Exodi?

"Cash buyer", according to some estate agent body that I can't remember, is someone who has the cash in the bank. What many estate agents use it to mean is someone who doesn't need a mortgage, but still needs to sell their current property. I've never heard it to mean someone who doesn't need to sell a property but does need to get a mortgage.

It was a tongue in cheek comment regarding the fact people advertise themselves as Cash Buyers whilst still needing to acquire the money through various means. Albala seems to have noticed my joke:

Albala wrote: »

I have read of the latter definition being used by buyers, who then turn out to need a mortgage.

AnotherJoe

Cakeguts wrote: »

A cash buyer is someone who has all ready got the whole purchase price in a bank or in savings and who doesn't need any loan of any sort to buy a house.

Someone who will have the cash after they have sold a property to get it is not a cash buyer until they have sold the property and got the money in the bank.

Someone who needs a loan of any sort to buy the property is not a cash buyer.

Some people claim to be cash buyers when they aren't because having the cash relies on them selling a property. They only become cash buyers after they have sold the property and they have the money in the bank.

A real cash buyer does not have to get hold of the cash to buy the property because they already have it.

It's more nuanced than all that. You say "a real cash buyer does not need to get hold of the cash" "and "does not need a loan". I was once a cash buyer. The money came from cash already in the bank and an increase on my offset mortgage, which is a loan. Write a cheque to myself , extra £80k, as far as the seller was concerned I was a cash buyer as the cash cane from my bank.
And whilst I mostly agree with your definitions the point is not everyone does so you need to check the buyer is operating on your definition not theirs. Sometimes (and misleadingly) cash buyer is used as a code word for "no chains - eg they will be getting an mortgage but don't need to sell. Not my definition not yours but maybe it's theirs so check!

Albala

I would have thought that increasing a mortgage would mean that the lender would need a valuation etc. on the house which would mean I wouldn't define the person as a cash buyer, but maybe my confusion is in the definition of an offset mortgage, I've never heard of one. I don't want to be nosy about your personal circumstances so by all means tell me to mind my own business if it would mean explaining something personal, but could I ask, what's an offset mortgage?

AnotherJoe

In an offset mortgage, your mortgage is flexible up to a limit. Say its agreed you can borrow up to 75% of the valuation of your house.

If your house is worth £400k then can borrow up to £300k. Suppose your mortgage on your residential house is actually, at the time £150k. So you've only borrowed £150k of a max £300k and you can borrow up to the other £150k just by writing a cheque to yourself (the account came with a cheque book ! ).

The other part of the offset was savings. So suppose you also had £50k cash. So, although your mortgage was £150k, with £50k cash in the offset you only paid interest on £100k and the effective rate on that £50k was your mortgage rate which at one time was around 5% or so which you were effectively earning without paying tax on it (because these were the days you paid 20% on all interest). And because you had £50k cash offsetting your mortgage you could now also borrow up to £200k!

I used this to buy a house and also pay off a car loan - get PCP at say 8%, get incentive of £2k for taking out PCP, pay off after a few days and move to offset rate which by then was about 1.5%.

This was a Barclays/Woolwich deal. Barclays starting reining these in a few years back, decreasing the amount you could borrow. I dont have it any more and I very much doubt you can get such generous open ended terms anymore either.

Albala

Gosh, Joe, that's complicated! I assume it means that you could extend the mortgage on the current property to generate capital, so you wouldn't need a valuation on the one you wanted to buy in order to get the money? If so, then that does make you a cash buyer, I can see why now.

AnotherJoe

exactly. I didn't need a valuation searches survey or anything like that.