Better prices no chain then cash purchase

Raywk

I've created a post sell rent buy but wanted to keep this separate.

Property value £300K

Do you gain a better selling price with no-chain.

Would the answer depend on cash buyer, cash from sale, mortgage buyer?

Do you obtain a lower purchase price with cash in bank rather than cash from sale?

We've moved a few times and agents dismiss the thought as not a good option but is that self- interest?

Thanks 

MikeJXE

I have bought 8 properties in my lifetime and from the forth was a cash buyer, no mortgage 

I don't think being a cash buyer alters the price in any way but it does give you more chance of your offer being accepted even if it's less than the asking price 

MorningcoffeeIV

Any difference would be in desirability, rather than value, but it would be minimal due to all the other factors.

No chain could also result in lower selling price, as buyers may believe the sale price isn't as important to you with no onward purchase. 

diystarter7

Hi OP

It depends on what you are looking for, EG

looking to buy in an area not so great, diff to sell properties, only slight advantage ie cash, ready yo go buyer to someone just wanting to get rid.

Nicer location, property you are buying is chain free, EG owners died and or moving to another country, shleter etc, etc - and the property possibly belongs to children that inherited it - of it its more than one child, usually one or more is desperate to get their hands on the money and they will be eager to sell and fear another price crash or just want the money as its like a lottery win to them

Being chain free, cash buyer always shortens the chain and you too buying a ahin free place 100% speeds up the process

Then there is luck

Thannks

MobileSaver

MikeJXE said:

I have bought 8 properties in my lifetime and from the forth was a cash buyer, no mortgage ... I don't think being a cash buyer alters the price in any way

^ This.

The vast majority of people could not care less whether you pay with with money from your bank account, money from selling your existing home or money lent from a bank so only in exceptional cases will how you pay affect the price you pay.

ciderboy2009

In my opinion being a cash buyer/ chain free/ whatever the latest idea is doesn't make any difference whatsoever to price or desirability as a purchaser.  They're just things made up by Estate Agents to make you think that they're helping you.

When I bought my first property I remember the EA telling me that they would push me as a good choice to the vendor as I didn't have a house to sell.

In subsequent purchases they've said that they would push as a good choice to the vendor as a good choice because I've previously gone through the house purchasing system so know how it works.

I've also had a sale almost fall though because the "cash purchaser" decided to get a mortgage instead.

At the end of the day, I would imagine that at least 90% of houses just go to the person that offers the highest amount

Schwarzwald

MobileSaver said:

MikeJXE said:

I have bought 8 properties in my lifetime and from the forth was a cash buyer, no mortgage ... I don't think being a cash buyer alters the price in any way

^ This.

The vast majority of people could not care less whether you pay with with money from your bank account, money from selling your existing home or money lent from a bank so only in exceptional cases will how you pay affect the price you pay.

likely true, but probably more due to the fact that majority of people are not (fully) rationale and/or sophisticated actors.
there should be a value that is attributed to a cash buyer. the question is how much?
in my opinion, i'd say between 2-3%, meaning, for example:
between (A) a FTB that heavily relies on a mortgage offering £100k on my property, and (B) an experienced property buyer with 100% cash in hand who is offering £97-98, I'd would go for (B) the experienced buyer.

The risk that the purchase falls through with A is significantly higher than with B, and an aborted process would have time but also financial consequences in form of transaction costs spent on advisors, etc

MobileSaver

Schwarzwald said:

MobileSaver said:

MikeJXE said:

I have bought 8 properties in my lifetime and from the forth was a cash buyer, no mortgage ... I don't think being a cash buyer alters the price in any way

^ This.

The vast majority of people could not care less whether you pay with with money from your bank account, money from selling your existing home or money lent from a bank so only in exceptional cases will how you pay affect the price you pay.

in my opinion, i'd say between 2-3%, meaning, for example: ... The risk that the purchase falls through with A is significantly higher than with B, and an aborted process would have time but also financial consequences in form of transaction costs spent on advisors, etc

Swings and roundabouts. The FTB is more likely to be buying a home for themselves and so be emotionally invested and do what it takes to secure the property whereas cash buyer is more likely to be buying an investment with a take it or leave it attitude. I.e. why they are buying is more important than how they are buying.

Statistically one in three property sales fail, I haven't seen any stats to suggest cash buyers are less likely to fail but you may be right.

However, even if you are right, you are suggesting a seller should take up to a 3% hit on a typical £250k house which is £5000 to £7500. So even if a seller takes the risk of a FTB at full price and it falls through they're probably only going to lose £1000 (if that) so they could have four or even five failed FTB transactions and still be better off than choose a cash buyer...

ashleyj722

MikeJXE said:

I have bought 8 properties in my lifetime and from the forth was a cash buyer, no mortgage 

I don't think being a cash buyer alters the price in any way but it does give you more chance of your offer being accepted even if it's less than the asking price 

In a buyers market I would take a discounted offer from a cash buyer due to higher chances of sales falling through at the moment. 

MobileSaver

ashleyj722 said:

MikeJXE said:

I have bought 8 properties in my lifetime and from the forth was a cash buyer, no mortgage 

I don't think being a cash buyer alters the price in any way but it does give you more chance of your offer being accepted even if it's less than the asking price 

In a buyers market I would take a discounted offer from a cash buyer due to higher chances of sales falling through at the moment. 

So you would prefer to accept a discounted offer and definitely lose between £5,000 and £10,000 rather than risk losing £500 or £1,000 if the sale falls through?!?! I don't get the logic but each to their own...

TripleH

As a buyer, a chain-free purchase is more desirable as you know there are fewer parties thus a lower chance the deal will collapse.

I would be honest from the start, if you're going into rented, state that and ask for a long lead time to find somewhere to rent.

My mother did this as selling her home was the key element for her. Her buyers were aware and happy with this from the off.