Viewing 40 posts - 1 through 40 (of 61 total)
  • Buying a house for cash (and no chain) – what kind of discount?
  • brooess
    Free Member

    So… London house prices are so silly that I’m thinking – like a lot of other people of normal incomes it seems – of moving out and doing a combination of working from home and long commutes. Even a crash of 30% from today’s asking prices would still be pricey and there’s not much liklihood of that…

    Relative prices drop rapidly once you’re above 90 mins commuting from central London, to the extent that what I need for a deposit in London I could buy for cash – if I can negotiate a discount for being a no-chain cash buyer.

    Question is, what kind of discount would you be prepared to give to a buyer in this circumstance? 5%, 10, 20?

    mikewsmith
    Free Member

    Depends what somebody else will offer, unless you find somebody desperate to move why would they offer you a discount?

    Harry_the_Spider
    Full Member

    0%.It depends on the sellers circumstances.

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    totalshell
    Full Member

    you ve not bought many houses? solictors wont accept anywhere near that amount of money in cash for starters. the only purchaser who ll be tempted will be enticed by the quick sale and they are the distress sales.. so your going to be lookin at derelict houses, empty properties occupied properties etc etc. for your own immediate occupancy these would not be suitable.

    BillMC
    Full Member

    I’ve been in that position and it very much depends on the seller. My bloke was desperate, living abroad and still paying the mortgage/bills etc. However I think he’d run up so much debt he could barely move for giving a discount. I still got a result though and since then bought next door too.

    twinw4ll
    Free Member

    Sold our last house to a cash buyer, asking price was £60000, that is what they paid. I did play hardball though.

    As a seller the only advantage with a cash buyer is you don’t have to wait for their mortgage to be approved? Why would you offer a discount?

    Unless the buyer was offering a suitcase full of used £50s, in which case you might be getting a visit from the fraud squad.

    D0NK
    Full Member

    very limited experience but I don’t think cash gets you anything, no chain may get you chosen over another buyer at the same price, but in terms of “discount” I bet it’s only worth a couple percent before they go with the chain buyer paying more.

    unless you luck out and find a seller desperate to sell a house that you want fast

    hatter
    Full Member

    Depends entirely on your seller and what emphasis their position places on a quick transaction.

    We got at least 25K off our because we had a buyer lined up from a previous house chain that had collapsed and were to all intents and purposes a cash buyer, our seller was a developer who’d borrowed heavily to build another house and desperately needed to get ours shifted so they could pay back their loans.

    To them having a buyer who was willing and able to get a move on was well worth the discount. They’d already spent a year being messed about by other buyers which is why the loan was catching up with them.

    If your seller is in no hurry and their main concern is getting the maximum possible return then the fact you’re chain-free and buying cash will be largely irrelevant.

    Do a bit of digging with the agent and try to find out the context in which the house is being sold, try to get an idea of how much of a hurry they’re in and base your offer on that. Make sure the agent who’ll be presenting your offer is fully briefed on the advantages of what you’re offering as well.

    maccruiskeen
    Full Member

    Perhaps you should be looking at auctions rather than estate agents

    footflaps
    Full Member

    No chain and cash might get you to the front to the queue, but not much in the way of discount.

    dazh
    Full Member

    In my recent experience of buying a house the only advantage in being a cash buyer was that there was a better chance that a seller would sell a house to you for the same price as opposed to someone with a chain. In fact where we were looking demand was so high that you had no chance if you weren’t a cash buyer. Some sellers weren’t even offering viewings if you had a chain.

    cookeaa
    Full Member

    Harry_the_Spider – Member
    0%.It depends on the sellers circumstances.

    This ^^

    I doubt the seller’s in the same boat as you, most people outside of London would be looking to maximise the profit from selling their current house to clamber further up the ladder in the same housing market and they’ve now got less budget as a result of selling cheap…

    Possible exceptions might be people in a hurry to relocate ooop north to a cheaper housing area, or maybe new build being sold by the developer’s where shifting a unit for cash today might benefit their balance sheet a little more…

    But yeah as a private seller if you asked me to knock 10% off of my commuter belt house because you have cash I’d politely tell you to eff off, your being cash rich wouldn’t actually benefit me much as a typical seller…

    aP
    Free Member

    90 minute commute? I know people who do this and they have very limited life outside of work. I assume you work somewhere with regular 9-5 hours.

    nickjb
    Free Member

    You would be in a good position for non standard builds as these are hard, if not impossible, to get a mortgage on. Limits the market and makes them cheap. Just bear in mind it will be a pain to sell. I think a lot get bought by developers and knocked down. But seriously though, a 90 minute commute!? No way!

    nemesis
    Free Member

    footflaps – Member
    No chain and cash might get you to the front to the queue, but not much in the way of discount.

    This. It’ll put you in a stronger position if you’re tied on an offer with someone with a mortgage but unless the seller is not buying somewhere else, they’ll still be doing the mortgage process so you paying ‘cash’ won’t really speed things up.

    Given the various posts you’ve made about house buying, just a bit of advice – I think you’re going to have to give up on the idea that you can somehow ‘beat’ the system or at least do something that other people don’t – you’re ultimately going to have to play the game by the same rules/restrictions as everyone else and end up paying similar and take the same risks. Moving further out is certainly going to help you do it cheaper but plenty of others will think the same so again, you’re not really doing anything different.

    cookeaa
    Full Member

    And don’t expect seller’s to be unaware of the effect London has on their local housing market, I’m in Reading, which as you might be aware, recently had it’s Station upgraded.

    So We’re expecting property values to rise generally in the next few years as it’s a commuter hub, 40mins to London, under an hour to Southampton or Oxford, Right on the M4, and Berkshire’s not a bad county for stuff to do at weekends, schools, etc, etc IMO, great place for City types, looking to strike some sort of work/life balance?…

    I suppose if you wanted a shorter commute and cheaper housing there’s always Slough… 😉

    suburbanreuben
    Free Member

    If the seller is in a hurry you might get a couple of k off.
    The house next door to us was sold last year by sealed bids. It hadn’t been modernised for 60+ years- no hot running water etc- and needs much work doing, and was a probate sale.
    The chap who bought it was the 4th highest bidder, some £50k lower than the top bid, but he was paying cash, and the equity release co who mainly owned it just wanted their cash out, ASAP!
    You can get a bargain but they’re very few and far between these days.

    peterfile
    Free Member

    you ve not bought many houses? solictors wont accept anywhere near that amount of money in cash for starters.

    Have you? Cash doesn’t generally mean turning up with a suitcase full of notes 🙂

    bland
    Full Member

    Cash is only king when buying a house at auction that you cant get a mortgage on. No kitchen, bathroom etc, structural issues etc.

    SO if you are prepared to do some graft you could end up quids in.

    Otherwise cash isnt really cash, its just money moving from your bank to theirs as a mortgage would, and its not the mortgage which slows the job down in any case, its the useless solicitors so you still have the same issue.

    All it does is stand you in better stead if two buyers want a place, in which case you will be in a better position, however if there are two interested parties why would you discount at all?

    bland
    Full Member

    on the other hand if i had enough to buy a house cash id be moving well out and become an odd job man! How much would you really need to earn if you only had bills and no mortgage? Kind of makes the whole work thing pointless, do something which is lifestyle based over trudging 90mins into london

    NZCol
    Full Member

    We did it and the owner had tenants moving out when we wanted to be in, was a developer and we negotiated about a six figure sum off the valuation to complete in 4 weeks. I put in a 5k a week penalty for delay which was mutual as we could go any time and he was bullish about us doing so. Experience has taught me to fight fire with fire. He delayed by 7 weeks due to not having a signed off building warrant for the garage ! He tried to negotiate the clause at the end which didn’t end well for him. So sometimes it works,

    Bustaspoke
    Free Member

    I was in this situation 18 months ago,the seller had inherited the house & I managed to get £12000 off the price.I don’t know if I got the money off due to the place needing modernizing or because it was a buyers market.
    Ultimately I think it depends on how desperate the buyer is to sell

    climbingkev
    Free Member

    you ve not bought many houses? solictors wont accept anywhere near that amount of money in cash for starters.

    This is rubbish.

    It puts you on a far stronger position, simply buy making you a more reliable buyer -less to go wrong with loans and chains. But again the sellers “need to sell” will govern your leverage. Auctions could be worth a look, but then you may need to keep some cash back for refurb etc. Look for things that have been on the market for a while, recently reduced, changed agent etc. This shows a bit of desperation. Sounds a little mercenary, but that’s your target audience. Property Bee is a useful tool for this, Zoopla has some good options too.

    Remember the house is only worth what the buyer dictates, the agents just pretend to be buyers when they put a (normally inflated) price on it. So if you want the property you find dont risk losing it because you think you’re entitled to a discount. The seller decides your entitlement, which is why it helps if they’re desperate.

    Depending on your budget, if you’re looking at a bog standard 3 bed semi, drive, garage etc that’s been on the market for 6 months and is accurately valued I wouldn’t hesitate at going in 10% under with an explanation of your position and work from there.

    Also worth knowing that if an agent says their client wont accept that offer the moment you propose it, you can demand that the offer is still put forward. The agent is legally bound to do this. The seller may have told the agent a bare minimum because they are expecting low offers (i.e. know their house is over valued) or know they are a little weak willed and really should accept your offer, but are just being greedy/trying their luck! I’ve trumped where this has been the case.

    Kev

    poolman
    Free Member

    I got c 5% off for cash the last 2 I bought. Its feb now so you may catch someone wanting to exchange before the end of the tax year.

    I looked for ages & knew exactly what I wanted, tbh I’d have paid a premium if I had to but got a discount.

    midlifecrashes
    Full Member

    If you can add another 12 minutes to your commute, come to sunny Doncaster, the Riviera of South Yorkshire.
    £29,950 gets you this, pied a terre. All mod cons, hot and cold running race rioters and five minute walk to the station.

    Property boom? Trickle down? Not round here. Meltdown of prices in some areas, prices for old small terraces are dropping by the month.

    trail_rat
    Free Member

    With a tin foil hat the size of yours and your thinking of buying 90 minutes from work…

    Mental.

    suburbanreuben
    Free Member

    you ve not bought many houses? solictors wont accept anywhere near that amount of money in cash for starters.
    This is rubbish.

    There seems to be some confusion about “cash” buyers and wheelbarras full of used monkeys…

    midlifecrashes
    Full Member

    “Cash” being not reliant on mortgage or waiting to sell something else to get the money. I’ve done it several times now, and while it gets the buyers(or rather their estate agent) attention, it won’t help with a well presented house in a popular area. In a repo/distress sale, I believe it gives you an edge, although it only takes two people to spot an underpriced house and you can be in a bidding war. However there are many people sitting in decent houses who have remortgaged up to their value and can’t realistically drop their price.

    wrightyson
    Free Member

    You’d have got nothing from us other than the house was off the market as you’re not in a chain. The three we’ve just sold to cash buyers have taken a ridiculously long amount of time to complete, I genuinely do wonder what solicitors do for their **** money sometimes!

    sharkbait
    Free Member

    We sold my mums house last year to a true (no mortgage) cash buyer. We reckoned a ‘normal’ buyer would have to come up with > £10,000 over his offer in order for us to contemplate it.
    House price was £430k

    anotherdeadhero
    Free Member

    We got 20% off. But that was off the builder, for a new build, once they’d sold all the other properties off the site and they wanted out. Plus it was when the economy had just crashed.

    If private buyer, they prob can’t afford to give you owt off.

    ampthill
    Full Member

    I think that the discounts can come from being prepared to act quickly and take risks

    In other words agree a price and then not faff around waiting for searches or surveys. This works works well if you’re buying 10 houses per year and the discounts cove the losses on the ones that go bad.

    But to do that on a one off would be mad

    I think being a first time buyer its pretty irrelevant f you need a mortgage or not

    tonyg2003
    Full Member

    Just sold my mums house today (to pay for care home). Cash buyer (no mortgage) and full asking price.

    It depends on the asking price and how many buyers you have interested.

    thisisnotaspoon
    Free Member

    We got our house based on already having the mortgage lined up, solicitors in place, etc so it was pretty much a case of survey, searches and done. We were renting out our old flat as we could just about stretch to the deposit on the new house without having to go below the LtV threshold for BtL on the flat. And all apart from our solicitor was done in house by their EA, they even arranged the mortgage so knew we had it ready. Basically we presented them with the least faff it could possibly have been without turning up with a suitcase of cash.

    Got no discount though, and the seller was desperate. The house still sold on the first day (we made the offer in the morning) and we were one of three offers! The housing market outside of London (but commutable) isn’t possibly as flat and depressed as you think it is.

    DrJ
    Full Member

    I bought for cash (well, small mortgage), and no chain (London Town). My bid was about 5K less than the top bid but the seller chose me as I was ready to complete, less chance of me wandering off and seeing something else.

    sharkbait
    Free Member

    ‘Cash’ means nothing really, you’ve either got the money or you haven’t. I wouldn’t care whether the money is coming from savings, stolen or a mortgage – what would matter to me is lack of chain and ease of sale.
    Discount for cash? Nope.

    breadcrumb
    Full Member

    We put an offer on a house last year, no chain, mortgage in place. We’re missed out by less than 1% to some buyers that were in a chain.

    Managed to get over 6% off the next house we put an offer on though.

    towzer
    Full Member

    You might get a bit off if you can ‘complete’ an existing chain (or make a chain very short) and work to specific timescales.

    I think we got a bit off when we ‘joined’ a two house chain. (ie the seller of the one we wanted was going into an empty property), I think it was for the convenience/certainty (and I was stunned when the estate agent actually made me prove that I was an actual cash buyer by production of appropriate paperwork). As said above I don’t think it’s the actual cash concept (ps solicitor max cash amount was 2k) it’s the certainty/planning that not being in a chain offers (*as certain as you can with houses)

    retro83
    Free Member

    Before now I would have offered nothing, but after the clusterfudge of my sale I would be tempted to give a small sweetener for cash.

    The buyers mortgage provider started dicking the buyers around after (allegedly) already giving them a mortgage in principle. Took 6 months to sort out, then they wouldn’t offer a mortgage at the original amount as the market had fallen. Meanwhile we almost lost our purchase due to pressure from up the chain.

    A grand to save 6 months grief (and repeated phone calls to an estate agent who says “to be honest with yourself” every 30 seconds) = bargain.

Viewing 40 posts - 1 through 40 (of 61 total)

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