Chain free, cash buyer - what is it worth?

ss2020jd

I suppose it all depends on the seller’s circumstances and whether there are any other offers to compare to but in the case of selling my mum’s house (as POA) a first time buyer was worth a 3% (or £10k) reduction, on condition of a quick sale.

This was because there were no other offers and the longer it stayed on the market, the more it would have cost in terms of bills, maintenance, long journeys to and from to check on the property.

Despite a very slow start and some issues with the buyer’s solicitor, we actually finally exchanged this week, and are due to complete at the end of the month. I was concerned they may start trying to negotiate more off after survey but thankfully they have been true to their word and it’s taken three months from offer to exchange.

if there was a cash buyer/offer I may have chosen them due to no added complication of a mortgage and their requirements but that wasn’t the the case. With no chain FTB my mum can start earning interest the sooner the money is paid into her account so that counts for a lot as well, especially as the money is being used to fund her very expensive care home. 

user1977

"No chain" is worth more than "cash" - I wouldn't expect to have any problem getting a mortgage, so that's hardly likely to delay the transaction once everything else has also been dealt with. Obviously different if it's somebody who has trouble getting a mortgage, but then people with "cash" often seem to have difficulty finding it...

Albermarle

BigCoffeeMonster said:

Hi everyone,

As a chain free, cash buyer, would you offer below asking price on a property? If so, is there a rule for what's a fair % to offer below asking without insulting anyone? 

Thanks in advance for your thoughts.

More important issue is that is the asking price correct, or overblown? You need to judge as best you can the real value of the property and make an offer on that basis. Then the fact you have no chain could give you an edge over similar properties.
Don't worry about fairness or upsetting someone too much, there is too much money at stake. 

Albermarle

annetheman said:

I think the answer is: it depends!

My dad - cash buyer, no chain
For this £325k house in Surrey, my dad offered £310k in March. He is a cash buyer (house has been sold in January to a developer who is demolishing it to build some flats; mortgage fully paid years ago, so he is allowed to stay for an indefinite period until he finds a house - they are also helping him with moving costs, stamp duty, disturbance lump sum etc but no time frame demanded).

The offer was declined, a counter of £319k given, probably due to Zoopla valuation.

It's still on the market, like many houses where the seller is reluctant to concede to the market ebb...

Me - mortgaged buyer, chain
For this £375k house in London, I offered £365k and it was accepted in January (I have a shared ownership leasehold to sell, so it took far longer than a normal sale because of additionals such as waiting aimlessly for the 6-week exclusive nomination to lapse, etc). Timelines didn't work for the seller so it collapsed, but they had other offers and accepted mine after I got my mortgage in record time (3 days from full app to offer).

I'm now buying another house approx £25k under asking, where the competing offer was a cash buyer investor - EA said they kept chipping away the offer price for small things and so went with me because I was "straightforward" and honest. 

So I guess it really does depend, in my limited experience...

Forum advice ( for your own safety) 

Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. 

peterhjohnson

Being a cash buyer allows you to consider properties that are difficult/impossible to mortgage. Such properties are usually cheaper for that reason, 

Gers

When I sold my late DM's property it went to closed bids, six notes offered and the top one was a cash buyer with an extremely high offer.  Even the EA was astounded. I then applied for Confirmation and the buyer was happy to wait for it to come through, think it was six months before Confirmation and conveyancing took place.

I was very happy with my cash buyer!

annetheman

Albermarle said:

annetheman said:

I think the answer is: it depends!

My dad - cash buyer, no chain
For this £325k house in Surrey, my dad offered £310k in March. He is a cash buyer (house has been sold in January to a developer who is demolishing it to build some flats; mortgage fully paid years ago, so he is allowed to stay for an indefinite period until he finds a house - they are also helping him with moving costs, stamp duty, disturbance lump sum etc but no time frame demanded).

The offer was declined, a counter of £319k given, probably due to Zoopla valuation.

It's still on the market, like many houses where the seller is reluctant to concede to the market ebb...

Me - mortgaged buyer, chain
For this £375k house in London, I offered £365k and it was accepted in January (I have a shared ownership leasehold to sell, so it took far longer than a normal sale because of additionals such as waiting aimlessly for the 6-week exclusive nomination to lapse, etc). Timelines didn't work for the seller so it collapsed, but they had other offers and accepted mine after I got my mortgage in record time (3 days from full app to offer).

I'm now buying another house approx £25k under asking, where the competing offer was a cash buyer investor - EA said they kept chipping away the offer price for small things and so went with me because I was "straightforward" and honest. 

So I guess it really does depend, in my limited experience...

Forum advice ( for your own safety) 

Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. 

Thanks - to clarify none of these are my own property or prospective properties - 1 offer rejected, 1 sale collapse. I do not post my own actual property links!

RHemmings

Hoenir said:

Other than a potential saving of a few weeks in time. What else are you offering to the vendor.  Less money isn't an attraction in itself. 

Less chance of a chain breaking down and having to start all over again. I would think that would be the biggest advantage. 

propertyrental

RHemmings said:

Hoenir said:

Other than a potential saving of a few weeks in time. What else are you offering to the vendor.  Less money isn't an attraction in itself. 

Less chance of a chain breaking down and having to start all over again. I would think that would be the biggest advantage. 

Might give you a slight edge over someone in a chain, but not to the extent of a cost saving.

Of course, everyone's circumstances are different, as are their motives, but given a choice between a cash buyer Vs someone with a chain offering a higher price, I'd go for the higher price.

indeed, sometimes it pays to be wary of cash buyers who are more inclined to pull out or reduce their offer later.

pjs493

I’m buying as a cash buyer and offered 10% under the ‘offer in excess of’ price. The OIEO price had already been dropped six months before I put my offer in by about 12%. The house had been in the market for almost a year, and, despite the estate agent suggesting there had been lots of interest, I suspect there hadn’t been much at all, at least recently. In the end we settled on a purchase price just over 7% below the reduced OIEO price. 

However, I’m still awaiting gas and electrical safety certificates after the survey suggested it needs a full rewire and new heating and hot water system. I’ve asked the agent for these several times and they’ve not been forthcoming. I suspect the electrical certificate will show the work needs doing and this wasn’t disclosed by the agent so I’ll be looking to renegotiate the price down by the cost of the rewire at least. 

I also have concerns over the EPC certificate as there are several issues with it, eg stating it is fully double glazed to modern standards, whereas it’s actually single glazed original sliding sash windows. 

I believe the vendor was happy to ‘go low’ because I was a cash buyer, but I don’t know how much of this is just estate agent talk and how much of it was that they were happy to get a reasonable offer at all after the time it had been on the market. At least with me they knew that the sale wouldn’t fall through if I couldn’t get a mortgage, because I don’t need one. So it takes away one risk factor. I also made it clear from the moment I put my first offer in that I was keen to be in by the end of the summer holidays in order to get children settled before the new school term, so the vendor knew that I had a target timeline despite not being in a chain. So again, no risk of the sale dragging on from my side.