Need advice on purchasing an apartment - Cash buyer

Messiah9

Hi,
I'm new here and also in the UK. Well, not exactly new in the UK but been here for almost 3 years. So far I've been living as a private tenant in an apartment and I'm on a work-permit visa. Now that I have some clarity about my future here, I'd like to purchase an apartment somewhere in south-east of England. Probably, Reading/Slough area.
I plan to pay around 80% to 90% of the total price with cash (I think that is what is called a cash buyer, please correct me if I am wrong). Or a cash buyer is someone who is willing to pay the entire cash all at once to the seller?
My question is: I am targeting a 2 bedroom apartment in the price range - 250K GBP to 300K GBP. If I cash buy (pay all at once), what are the advantages of that as opposed to taking a mortgage from a bank? I believe, the property owner will be more interested in selling it to a cash buyer since I'm ready to pay right away and no need to wait for a bank loan to clear.
Since this will be the first time I'm buying a property in UK, I want to be careful because estate agents might trick me or get some extra money out of me since I don't have prior experience. Is it better to deal with the owner directly without going through an estate agent? Looking for suggestions.
Thanks.

[Deleted User]

A cash buyer is someone who doesn't need finance to buy the property.

Owners don't generally care. They get cash either way. Just sort your borrowing out before making an offer.

AdrianC

Messiah9 said:

I plan to pay around 80% to 90% of the total price with cash (I think that is what is called a cash buyer, please correct me if I am wrong). Or a cash buyer is someone who is willing to pay the entire cash all at once to the seller?

"Cash buyer" means you don't need a mortgage.

The only difference to the vendor is if the property is going to be difficult to mortgage. The vendor gets 100% of the property sale price at completion - the only difference is whose bank account it goes from to your solicitor to their solicitor...

davidmcn

"Cash buyer" means you have 100% of the price - if you only have 80 to 90% then I presume you're planning to get a mortgage for the balance?

I wouldn't expect sellers to be all that excited about cash buyers, the only advantage is the timescale to wait for a mortgage offer, but often that is insignificant compared with the other things which hold up transactions.

If a property is being marketed via an estate agent then it's not a realistic option to bypass the estate agent - the seller will still need to pay them, and they're paying them because they want the estate agents to do the negotiating (and to an extent, guide you through things since you're obviously unfamiliar with the basics).

Messiah9

Deleted_User said:

A cash buyer is someone who doesn't need finance to buy the property.

Owners don't generally care. They get cash either way. Just sort your borrowing out before making an offer.

Okay. Do you think it would be easier to negotiate on the price or get some discount if I am a cash buyer? Or the only main difference is the speed at which a deal can be closed since the seller doesn't have to wait for the buyer to make arrangements for the financing?

Saga

Just wondering (naive question time): do cash buyers have to have checks to prove they're not laundering money?

AdrianC

Messiah9 said:
Do you think it would be easier to negotiate on the price or get some discount if I am a cash buyer?

No.

Or the only main difference is the speed at which a deal can be closed since the seller doesn't have to wait for the buyer to make arrangements for the financing?

The mortgage is rarely the defining factor in the time taken.

greatcrested

No probably not.

As explained above the seller gets 100% of the agred price and does not care much if ou pay i all or you borow some of it.

Yes, sometimes a cash buyer is slighty quicker to Complete, but to be honest other things can delay the purchase, so it makes litle difference.

Indeed, some sellers prefer a buyer using a mortgage, as they have to commit more money upfront (mortgage application fees etc) so are more committed. A cash buyer is more likely to change their mind or reduce their offer at the last minute....

davidmcn

Saga said:

Just wondering (naive question time): do cash buyers have to have checks to prove they're not laundering money?

Everyone has to, yes. Anti-money-laundering regulations apply to all transactions.

numbercruncher8

Surprises me that nobody has mentioned, but there are flats in the UK which are currently not mortgageable due to the fire certificate (EWS1). In the South-East I'd imagine there a few blocks, high-rises with cladding are prime candidates, but even smaller blocks seem to be requiring it as well.

Some of these listings appear as 'cash buyers only' in Rightmove. But there undoubtedly are more - I know someone whose block has not got the certificate but put their flat up on Rightmove. The hope being that by the time an offer comes and the legals are done the certificate will have come through, or a cash buyer comes in, or the bank relaxes the requirement. A cash buyer has no need for the EWS1 (although it restricts the onward sale similarly). 

Combine a flat like that with someone who cannot afford it - for instance through loss of work - and there will be some that go through at bigger discounts. If there were not discounts for cash, the 'we buy your house' firms would never exist. But you may have to work hard to find these opportunities. Something genuinely priced to sell in the market ends up going quickly.

hazyjo

Please read all you can on what "leasehold" actually is. You should make sure it's mortgageable even if you don't need one, should have over 85 ish years left on lease, no onerous clauses/ restrictions, check cladding, etc etc. Many more issues and potential problems to consider including ground rent and service charge/ maintenance, management company, freeholder, etc.