Cash Buyers

fiftythriftygirl

Hi

We are looking to sell our rental property and instead of looking at estate agents, we are considering a quick option of a cash buyers.  We realize the offer will be lower but there's enough equity to consider it.  However, there are so many stories of scammers, fraudsters etc we have on idea where to begin to look for reputatable or even if these exist?  Any advice would be welcome?

DullGreyGuy

The "we buy any house" type organisations are there to prey on service a very particular type of customer who needs to liquidate their property very quickly. They then need to be able to put it back on the market and either sell it for a profit or turn it into a rental obviously factoring in the stamp duty, legals etc. 

I wouldn't go as far as to call them scammers or fraudsters but they're sole purpose is to buy your home as cheaply as possible, no different to other buyers, but they have no emotional aspect to their decision making and by dealing with those that are desperate they know they can push further than most would and can walk away if you say no to a 15% reduction in offer an hour before the contracts were due to be signed. 

ReadingTim

Just tell your Estate Agent to market it as being for cash buyers only, and get then to only forward offers from people who can prove they have the cash sitting in the bank.  already, ie that they don't need a mortgage or to sell their current property before buying yours.  

Or just put it in for auction - the short timescales effectively rule out people needing a mortgage or who need to sell something first.  

It's then 'quick sale' housebuying companies that are the scammers - avoid them and you'll be fine.  

user1977

Why "cash" buyers specifically? Is there something which makes the property unmortgageable (e.g. is there still a tenant in situ)? Getting a mortgage offer isn't (usually) the slowest part of the process.

dinosaur66

they will offer you approx 70%-75% approx of the like for like area value

i personally would never take such a deal

if you have a tenant still in place you have to think of yourself first.

if you like them and they have been good tenants tell them you will pay for all there removal costs / give them back there deposit and  give them a £5k incentive to move and also give them a longer timeframe say 6 to 7 months 

if they refuse serve a section 21 notice and start proceedings

if you sell with a tenant in situ you are excluding 97% of potential buyers and unless your property is above average /tenant is paying full current market rent for your area and you drop 10% from what your local area sells at you will not get any interest

as you are a landlord you will be well aware that succesive govts are doing all that they can tax wise and regulation to drive out private landlords / stamp duty increases alone in most areas means first years rent is totally written off and now the buy to let model at 7.5% interest means your property must be at 13% to make it worth bothering for investors.

fiftythriftygirl

The property is empty and ok (could do with a tidy up as rented for the last 13 years). We realise that the price will be considerably lower and have rented it out for 13 years so no emotional connection.  I'm assuming we can walk away if they start trying to pull a fast one or not? 

Albermarle

Only selling to cash buyers restricts your potential pool of buyers too much.
More sensibly you can restrict to chain free buyers only, either with cash or a mortgage offer.

In any case some people say they are cash buyers, but when it comes to the crunch an issue comes up finding all the money.

If you want to sell quick, then go with an estate agent and just make sure the asking price is keen, and stipulate chain free buyers only. 

FlorayG

Cash buyer means nothing. Ready to proceed is more important i.e. no chain, their house sold ( not in the process but sold, they've moved out). These are the people who will give you a quick turnaround on a sale even if they have to mortgage

user1977

fiftythriftygirl said:

I'm assuming we can walk away if they start trying to pull a fast one or not? 

Yes, but why waste your time and money? All the "we buy any house" people do is flip it on to somebody else for a profit - so what you want to find are the ultimate buyers.

eddddy

fiftythriftygirl said:

We are looking to sell our rental property and instead of looking at estate agents, we are considering a quick option of a cash buyers.  

If you mean the "we buy any house" types of company, typically they're just middlemen, they don't have any money.


Typically, they work like this...

• They offer you, say, £250k for your house

• They look for a cash buyer who is willing to pay £300k for your house

• If they find a buyer, they buy from you for £250k, and sell to the cash buyer for £300k on the same day. They keep £50k as their profit.

• If they can't find a buyer, they walk away

(So it's better to sell it yourself for £300k, and keep that £50k for yourself.)

eddddy

fiftythriftygirl said:

I'm assuming we can walk away if they start trying to pull a fast one or not? 

As long as you're smarter than they are, and you can predict all the "tricks" before you sign anything.

In fact, you should probably get a solicitor to advise you before you sign anything.

An example of a "trick" is...

• The house buying company offer you, say, £250k for your house

• You accept

• The house buying company say you need to sign an option agreement saying that you will sell them your house for £250k

The house buying company gloss over the following facts...

• The option agreement lasts 6 or 12 months.

• The house buying company have the option of buying your house (they don't have to), but you're not allowed to sell to anyone else for those 6 or 12 months

So they now say "We'll only pay you £220k, instead of £250k".  And you either have to accept their £220k, or wait 6 or 12 months before you can sell to somebody else.