Any discount for cash buyers?

Slithery

kyleDyer said:

cash buyer pays less everytime.

Rubbish. 

csgohan4

Cash buyer can and will become 'suddenly needing a mortgage'.

Threads full of them sadly

So the name Cash buyer no longer means much tbh, it's the bottom line that is more important. Do you get a discount for paying cash compared to Contactless at your local grocery store?

I heard you used to be able to get a discount for buying cars outright with cash, people would bring suitcases of cash, but i think that practice is no longer in play now

LAD917

There is often a "discount" for a cash buyer, but 1) it tends to be smaller than people think in most cases, and 2) it's relative to what other buyers are willing to offer, relative to ask the price.  Most of my experience points to anywhere from 0 to 3%.

E.g., I sold a property to a cash buyer who offered the ask price (and wouldn't come up), v. mortgaged buyers who offered 3% over ask.  I felt like there was some risk of both down valuation, and that the buyers were stretching too much to afford the property.

The buyers offering 3% over ask were at their absolute max, and maybe even a little bit beyond it. There were other buyers offering 1% over ask, with better affordability, but still mortgaged, and the potential return wasn't worth the risk of needing a valuation, etc.  So I went with the cash buyer.

If the cash buyer had been ANY lower, I would have rolled the dice with one of the other offers, but in the end, I was happy to "forego" a hypothetical 3% but have a solid deal that completed quickly and easily.  In the end, the buyer never knew (unless EA chatted to him!) that he got any discount at all.  He paid the ask price.

In my most recent purchase, I got the property by going 2.5% over a cash buyer (but still below ask), based on what the EA told me.  I tend to believe it because the property was on the market for a few months, and I got calls from the agent every time there was an offer on the property.

verytired11

Looking at it from the other side, as a cash buyer be careful.  As has already been mentioned, without the mortgage lender 'interfering' by going through the paperwork with a fine toothcomb and refusing to take on risky purchases, you may be seen as the perfect solution for a hard to sell house or an overpriced house.  Everyone may work very hard to keep hidden from you some defect in the title or in the paperwork somewhere.

davilown

Yes it does, but not as much as previously.

As others have said, the key part is the speed at which you can complete - this can allow you to knock a few grand off the price

davilown

powerful_Rogue said:

I'd personally rather go with someone with a mortgage then a cash buyer.

Why? I was cash as I broke the chain to allow my buyers to get in prior to the stamp duty change

lisyloo

It depends on the situation, so the answer is it depends.
I sold a flat a few years ago.
it was to pay for nursing home fees.
there is no way I could have given a significant discount as the LA had an interest I.e. thy could have come after me.
I was honest and made it clear there was little wiggle room.
any delays/hassle were no of concern to someone in a nursing home.

in general I’d say buyers want the best price over and above speed/hassle but there’s doing to be a variety of circumstances,
I wouldn’t have thought many people would want or need or be able to heavily discount.

seven-day-weekend

We have been cash buyers twice .  Each time we have been the only bidder and the property has been empty.  I don't think it has gained us any advantage at all.

phoebe1989seb

We have been cash buyers a few times and imho it hasn't made much difference.

The most recent being in 2018, having completed on the sale of our previous house the month before. We had cash in the bank and were able to exchange/complete very promptly, but I don't believe we've ever received a discount as a result.

In fact in the case of one property, once the EA knew we had cash - considerably more than the asking price - they kept pushing us to increase our offer, ultimately going to sealed bids. We were happy to buy the house (a dilapidated project cottage in rural Wales) without getting a survey, which we also thought would work in our favour.

We were apparently the highest bidders - and according to the EA, the only ones with cash ready to go - yet the executors of the deceased estate accepted a lower offer from someone relying on a mortgage 🙄 When the sale completed it was £10k less than our offer.....

lookstraightahead

We've not been cash buyers but we've had low LTV which means less hoops to jump through. That, along with breaking the chain so we were ready to move, gave us a 10% (nearly) reduction on asking price (in the same mad market). Our buyers really really wanted a house and they also had a lot of equity, so in turn it worked as they got a discount too.

(this is in an area where things go "like hot cakes" same as everywhere else).
they chose us over another party who offered more than asking, as they had a house to sell and needed a 90% mortgage (apparently).