House Purchase - Cash Buyer vs Mortgage Buyer

Martin666_2

Hi

I’m offering on a house and in competition with another buyer.

I am a cash buyer, the other person needs a mortgage.

The agent is downplaying any advantage I have with cash as the other person’s mortgage is apparently approved in principal.

The house is a wreck and I would have thought that there is an advantage to cash in this instance. I’m guessing there is a risk that the mortgage company might not like the state of the property when they survey it.

Should I go in hard and offer a take it or leave it offer or is the mortgage buyer really as good as a cash buyer.

Any advice would be appreciated.

Thanks

m0bov

Cash buyer more likely to guzump. Mortgage buyer is investing emotional and long term commitment rather than making a quick buck.

davidmcn

Can you define "wreck"? Might still be mortgageable. 

AdrianC

The only time there is an advantage to being a cash buyer is if a lender are going to run a mile from the property.

If this place is indeed "a wreck", and the lender aren't lending in full awareness of that fact, then this is one of those cases.

Martin666_2

Thanks for the feedback, it probably is mortgageable, not too pretty tho.

I'm not trying to sneak in with a low offer to make a fast buck, just interested to see if I should just match the offer and hope there is an advantage.

Thanks

AdrianC

Don't be pushed into offering more than you think it's worth to you.
If the other guy really wants to pay more, and can persuade some fool to lend it him, then he's clearly got more money than sense, right?

Remember that if he's not after a high LtV mortgage, there's plenty of scope for the lender to downvalue it - all that happens is their perception of LtV increases. So long as it remains under their max of ~85%, all is good. If he only wants a 40% LtV mortgage, that means they could downvalue it by half and he can still borrow.