Better prices no chain then cash purchase

Debbie9009

I had a cash buyer try to buy my previous house for a lot less than it was on for, (50k just short of a third of the price)  it wasn’t enough to be able to pay the mortgage off and give me a deposit on my next purchase.  The estate agents kept on at me at it being a great offer because it was cash, but there was no way I could afford to give my house away so I declined, ditch the agents and relisted at 10k lower, as my price was a bit too much on the high side just not 50k to high.

It then sold to someone else who paid a sensible price 16k less than my first listed price and 6k less than it was on for at that time. They were very keen first time buyers.

I didn’t bother to try and negotiate a price with the cash buyer because I felt they were being completely ridiculous and would probably try for another reduction before exchange.

So like other posters I don’t think cash makes that much difference, and I would be careful of not going too low as you might find a seller refuses to deal with you.

jrawle

When I bought my house, the sellers turned down a slightly higher offer and stuck with me. The estate agents were furious. While I'm sure this was largely because they were extremely decent people who didn't want to see someone gazumped, I suspect the fact that I was in a position to buy without a chain, retaining the flat I owned, was also a factor. They had already missed out on one property. By going with me, they were able to complete when it worked for their chain, and I was happy to go along with their timetable. (I didn't actually move for three months, taking the chance to have some work done, and later sold the flat and reclaimed the additional stamp duty.)

Some people say, why accept a lower offer when you'll only lose £1000 if the chain fails. Well, money isn't everything. If you need to move soon for work or personal reasons, and/or you have seen your dream home and don't want to lose out on it, you might accept a lower offer from a more "reliable" buyer. In the current climate, people may also want things to go through quickly if they have reserved a good mortgage rate that is going to expire.

MobileSaver

jrawle said:

money isn't everything. If you need to move soon for work or personal reasons, and/or you have seen your dream home and don't want to lose out on it, you might accept a lower offer from a more "reliable" buyer.

I agree in the exceptional circumstances where you need to move quickly but that's a different situation to the vast majority of property transactions.

Whether cash buyer or not, there's no guarantee of a quick sale as many here will testify so in such a case you would probably sell the property via an auction rather than a traditional EA.

lookstraightahead

Personally I won't buy or sell in a long chain.

I can't remember moving where I'd be happy to wait a long time and would much rather take a hit on price than wait.

When I've bought, breaking the chain has always saved me money on onward purchases with others who wish to move asap.

We also sold a probate property to someone who was a cash buyer / no chain.

Gavin83

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.

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

My house is worth roughly £500k. There's no way I'd accept an offer £15k less from someone just because they were a cash buyer. Were the offers the same I might well choose the cash buyer or maybe even accept a few £k less depending on circumstances but anything more than that would be too much for me.

The cash buyer isn't perfect either. There are still a lot of issues with a cash buyer, some of which don't exist with a non cash buyer. There's certainly no guarantee of a quicker sale or even that the cash buyer will remain a cash buyer. It's not at all uncommon for that cash buyer to suddenly decide a mortgage might be better for them after all.