Cash Buyer - How Much Off Asking Price

eidand

Young_Turk said:

Crashy_Time said:

eidand said:

Young_Turk said:

eve824 said:

I would rather have a non cash buyer. I’ve always had trouble with cash buyers so would opt for someone with a small chain. They have much more investment in the process and so less likely to pull out. Both aborted sales I’ve had were cash buyers. 

That seems like you have had bad luck. Did your cash buyers pay for a survey? They might have more invested in the process than those obtaining a mortgage. Often the fees aren't up front when applying for a mortgage, so if a purchase falls through, the applicant moves on to the next one without paying for the first survey. A cash buyer obviously pays for everything. So if a cash buyer pays for a survey that's a significant investment. If a cash buyer doesn't have a survey, then surely offer to exchange could be very quick. So if they do pull out presumably it should be very quick.

happy_2008 said:

Why would you expect a discount just because you're a cash buyer is beyond me??

A cash buyer can buy your property. Someone who has an agreement in principle from a lender might be able to. 
A cash buyer is able to buy your property quicker and with less hassle.
In my first purchase the bank reduced the amount they would lend to me by around 10-15k, so I had to find another lender. There was also a shortage of surveyors at the time, so I had to wait a few weeks longer than normal. I was able to complete the transaction, but maybe the vendor would have accepted a bit less from a cash buyer to sell quicker and with less stress of it falling through.

My previous sale had a hold-up due to an issue with the mortgage. It was very annoying. I had started making offers on the next place, then wasn't sure where I stood. It was resolved, but I didn't know if I would have to find another buyer. Then, once I had an offer accepted on a flat, they revealed that the lease was short. This is yet another thing which is a bigger problem for mortgagors than cash buyers.

My current sale to a couple fell through as one of them lost their job, so the amount they can borrow is significantly reduced. If they were cash buyers they could have proceeded. Instead almost a year after listing initially I am still on the market.

Most people want their transaction to go through quickly. Once you have agreed a sale (even more if you are purchasing at the same time) you are probably looking forward to moving, so that might be enough reason to sell at a slightly lower price to achieve this. You may also lose the house you thought you would buy. If you break the chain, maybe it's easier for them to find someone else - maybe even a cash buyer!!! But there may be financial implications as well. For example, if you are upsizing and prices rise then you will be worse off:
e.g. you agree to sell for £500k and buy for £1m. This falls through and prices are now 10% higher - you agree to sell for £550k and buy for £1.1m, so you are 50k worse off (actually more than 50k worse off as you'll pay higher EA fees and SDLT). Maybe in that hypothetical example it would have been worth accepting slightly less than £500k from a cash buyer.

I think you'll find a lot of people would be quite happy if the transaction took a bit longer to complete, but for a higher price. For example, the move quick thing is irrelevant to me. I'l happily wait an extra 2, 3 weeks for 10-15k more. Speed is far from everything.

Some sellers will be waiting years if they don`t price realistically, cash buyer lets them get on with their lives, 20% off most of the over-priced stuff should be a good starting point.

Yes, though ironically many will be better off waiting if prices fall. If they are upsizing and prices crash, they will gain more on the purchase than they lose on the sale.
Landlords should definitely price realistically and accept low offers. Downsizers and STRs should think about pricing realistically, or accepting seemingly low offers. But you never know whether your accepting a low offer or if the market price is just a little lower than you thought.

please don't feed the troll, this guy is regurgitating the same thing over and over like a broken record. You really don't want to take advice from someone who is stuck in 1990.

Young_Turk

eidand said:

Young_Turk said:

Crashy_Time said:

eidand said:

Young_Turk said:

eve824 said:

I would rather have a non cash buyer. I’ve always had trouble with cash buyers so would opt for someone with a small chain. They have much more investment in the process and so less likely to pull out. Both aborted sales I’ve had were cash buyers. 

That seems like you have had bad luck. Did your cash buyers pay for a survey? They might have more invested in the process than those obtaining a mortgage. Often the fees aren't up front when applying for a mortgage, so if a purchase falls through, the applicant moves on to the next one without paying for the first survey. A cash buyer obviously pays for everything. So if a cash buyer pays for a survey that's a significant investment. If a cash buyer doesn't have a survey, then surely offer to exchange could be very quick. So if they do pull out presumably it should be very quick.

happy_2008 said:

Why would you expect a discount just because you're a cash buyer is beyond me??

A cash buyer can buy your property. Someone who has an agreement in principle from a lender might be able to. 
A cash buyer is able to buy your property quicker and with less hassle.
In my first purchase the bank reduced the amount they would lend to me by around 10-15k, so I had to find another lender. There was also a shortage of surveyors at the time, so I had to wait a few weeks longer than normal. I was able to complete the transaction, but maybe the vendor would have accepted a bit less from a cash buyer to sell quicker and with less stress of it falling through.

My previous sale had a hold-up due to an issue with the mortgage. It was very annoying. I had started making offers on the next place, then wasn't sure where I stood. It was resolved, but I didn't know if I would have to find another buyer. Then, once I had an offer accepted on a flat, they revealed that the lease was short. This is yet another thing which is a bigger problem for mortgagors than cash buyers.

My current sale to a couple fell through as one of them lost their job, so the amount they can borrow is significantly reduced. If they were cash buyers they could have proceeded. Instead almost a year after listing initially I am still on the market.

Most people want their transaction to go through quickly. Once you have agreed a sale (even more if you are purchasing at the same time) you are probably looking forward to moving, so that might be enough reason to sell at a slightly lower price to achieve this. You may also lose the house you thought you would buy. If you break the chain, maybe it's easier for them to find someone else - maybe even a cash buyer!!! But there may be financial implications as well. For example, if you are upsizing and prices rise then you will be worse off:
e.g. you agree to sell for £500k and buy for £1m. This falls through and prices are now 10% higher - you agree to sell for £550k and buy for £1.1m, so you are 50k worse off (actually more than 50k worse off as you'll pay higher EA fees and SDLT). Maybe in that hypothetical example it would have been worth accepting slightly less than £500k from a cash buyer.

I think you'll find a lot of people would be quite happy if the transaction took a bit longer to complete, but for a higher price. For example, the move quick thing is irrelevant to me. I'l happily wait an extra 2, 3 weeks for 10-15k more. Speed is far from everything.

Some sellers will be waiting years if they don`t price realistically, cash buyer lets them get on with their lives, 20% off most of the over-priced stuff should be a good starting point.

Yes, though ironically many will be better off waiting if prices fall. If they are upsizing and prices crash, they will gain more on the purchase than they lose on the sale.
Landlords should definitely price realistically and accept low offers. Downsizers and STRs should think about pricing realistically, or accepting seemingly low offers. But you never know whether your accepting a low offer or if the market price is just a little lower than you thought.

please don't feed the troll, this guy is regurgitating the same thing over and over like a broken record. You really don't want to take advice from someone who is stuck in 1990.

That's just arithmetic. If you are selling for 100k and buying for 200k, which would you prefer:
1) Prices fall to 90k and 180k before you buy
2) Prices increase to 110k and 220k before you buy
Can you see that you are 20k better off if you buy at 180 and 10k worse off if you sell at 90? So, can you see you are 10k better off?