Any discount for cash buyers?

london21

Auction purchase or a quick sale situation might help.
Auction properties sometimes have issues though.

kingstreet

kyleDyer said:

cash buyer pays less everytime.

... not even for a second hand car where dealers make more money out of flogging finance.

Nebulous2

A lot of the experiences here do not appear to refer to Scotland.

We sold in Scotland in March. We had  5 offers all over asking price. Two offers were the same. We chose the ones that said they were cash buyers, conditional on the entry date being on or before a date 7 weeks later. They then applied for a mortgage.

It’s very typical in Scotland to expect the sale to conclude 6 weeks after the closing date. If  buyers commit to that, then most offers are much of a muchness. 

If you are in a property hotspot, which appears to apply to much of Scotland at the moment, and the property goes to a closing date, then any advantage is marginal, if it exists. 

Greymug

lostinfrance72 said:

Hello

I have heard it said that cash buyers can maybe negotiate a reduction in the price for a property... is this true these days? Was it ever? We'd be buying in Scotland (if that makes any difference). 

Buyers in Scotland don't negotiate a reduction in price. After their formally submitted offer is formally accepted, there's no renegotiation.

What can sometimes happen is that cash buyers may offer less. Say a house is sold via last and final offers method, which is the most common method in Scotland, there may be a situation where the highest offer is home report valuation + 10%, while you get an offer from a cash buyer of home report valuation + say 5%. As cash buyers, they're trying to bank on the fact that they don't need a mortgage so can potentially pay sooner and with no risks of delays.

Happened to me once, but the difference between cash offer and highest offer was 7k, which I considered too big so I went with the highest offer and waited 8 weeks for completion (instead of waiting 1 week).

Silvertabby

When we bought our new build the sales administrator said that we were every sellers 'dream buyers' because we lived in RAF married quarters.  ie, no house to sell first and no set dates on our rental contract. 

 Nothing to do with our mortgage. And we got a discount (rare in those days) because we could guarantee to exchange by a set date.

clare19811

We're currently selling to a cash buyer and it's been a long drawn out process. They've questioned absolutely everything you could possibly think of and asked some incredibly stupid questions. They also seem to be continually asking for deductions for every little thing, we're very close to pulling the plug and remarketing but it will mean we lose our onward purchase too. 

Initially I was really pleased we had a cash buyer, assumed it would mean everything went through quickly without too much hassle, but that really hasn't been the case at all.

lookstraightahead

clare19811 said:

We're currently selling to a cash buyer and it's been a long drawn out process. They've questioned absolutely everything you could possibly think of and asked some incredibly stupid questions. They also seem to be continually asking for deductions for every little thing, we're very close to pulling the plug and remarketing but it will mean we lose our onward purchase too. 

Initially I was really pleased we had a cash buyer, assumed it would mean everything went through quickly without too much hassle, but that really hasn't been the case at all.

I would think that's just to do with the buyer/solicitor rather than them being a cash buyer.

I suppose you do have to do the job of the lender and make sure you're not paying over valuation.

so did they have a full structural survey etc? 

clare19811

lookstraightahead said:

clare19811 said:

We're currently selling to a cash buyer and it's been a long drawn out process. They've questioned absolutely everything you could possibly think of and asked some incredibly stupid questions. They also seem to be continually asking for deductions for every little thing, we're very close to pulling the plug and remarketing but it will mean we lose our onward purchase too. 

Initially I was really pleased we had a cash buyer, assumed it would mean everything went through quickly without too much hassle, but that really hasn't been the case at all.

I would think that's just to do with the buyer/solicitor rather than them being a cash buyer.

I suppose you do have to do the job of the lender and make sure you're not paying over valuation.

so did they have a full structural survey etc? 

Yeah it is down to a very nervous buyer, I'm just pointing out that being a cash buyer doesn't automatically make the whole process quicker, there are no guarantees. Ours isn't an investor but plans to live in the house themselves.

Full structural survey was done and we agreed to deduct some of the cost of works from the sale price along with some other deductions but aside from that the questions and expectations from them have been a little ridiculous and although we've been ready to exchange for a few weeks now we just seem to be at a standstill.

hazyjo

user1977 said:

hazyjo said:

JJR45 said:

powerful_Rogue said:

lookstraightahead said:

powerful_Rogue said:

lookstraightahead said:

powerful_Rogue said:

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

Why is that? 

A cash buyer has less to lose and can easily play silly games at exchange wanting additional discounts.

But anyone can do that. And actually if the lender values the house below the silly amount the buyer is happy to pay, then it's a bigger problem surely? 

. They have nothing to lose.

Mortgage buyer if doing the same would have to get their mortgage offer edited etc, 

Incorrect, their mortgage is up to the value the mortgage that as been offered at.
They can offer lower at the end without needing to change anything with their mortgage, they just draw down less.

Depends on the size of the deposit and LTV. The lender would of course need to know the new price and adjust paperwork.

The price generally forms part of the mortgage offer, so if it changes (usually beyond a de minimus level), the lender will need to be told and amend the offer - even if it doesn't affect the LTV bracket. 

Was more in reply to the first half of their paragraph.

("Incorrect, their mortgage is up to the value the mortgage that as been offered at.") I was saying in response to that, they may not actually get the same mortgage offer if the LTV or price has changed.

Absolutely agree (and thought I'd said) the lender needs to be told anyway of any price changes (not just if LTV has changed). Perhaps my last post wasn't so clear.

Falafels

We were cash buyers when we bought our house.

No discount expected or asked for. However, not having a chain ourselves, plus time left in our rented accommodation made the whole process of moving a lot less stressful.

I think difficult buyers will be difficult buyers no matter how they're financing their purchase - cash, mortgage or the fairies buying it for them.