Cash Buyers

Kids,
Any of you lot have any experience of cash purchases/sales recently?

We kicked the tyres off a place recently and though we didnt make an offer i wondered just how much an advantage being in a position to buy cash (almost) gives you.

I wont use exact figures but basically the property was asking say 220k. We could probably put our hands on say 180k.
From the register the asking price looks about right,house in a good area,recently ish on the market and should sell fairly fast.
We rent so have the advantage of not having to sell to complicate things.

Does it vary in as much as any other type of sale or has the cash situation a significant advantage (bar the obvious) when it comes to bargaining?

Any experiences of this type of situation?

I have lots of experience of bidding as a cash buyer and it has not made a jot of difference if bidding against someone getting a mortgage.
Not being in a chain is an advantage.

I’d disagree. Put your offer in writing. In your formal offer, set out the advantages of your having access to ready cash. That you can close quickly. Refer to the environment of mortgages falling through, loans being reduced following the banks survey, and the weight of paperwork involved. Quote some stats. In other words, present your offer as strongly as possible. Your offer / proposition as a buyer does not only come down to amount tendered. Set it out clearly. Make sure the agent passes on your written offer to the buyer.

No difference noted here, except when the house has a planning issue that would render it impossible for a purchaser to acquire a mortgage on it…

I know from personal experience it doesnt make any difference whatsoever being a cash buyer. They always take the highest bidder no matter what the circumstances

:neutral_face:

+1

macannrb
Post subject: Re: What is a “Cash Buyer”?
PostPosted: Fri Feb 17, 2012 11:37 pm
Offline
Neo Landlord

Joined: Oct 10, 2010
Posts: 274

+1 nothing focuses the mind more than the prospect of real money!

From an earlier thread, mind you I bought 3 years ago so maybe things have changed though I doubt it

viewtopic.php?f=10&t=43362&p=573373&hilit=+concentrates+the+mind#p573373

Lost out by 10 to a cash buyer, turned out to be blessing i the end but all the same cash does make as small difference, if I were you I’d go 50% LTV and hang on to some of the funds, the mortgage won’t stretch you and you keep something for a rainy day. The key things are to be proactive.

Have mortgage approval in principle in writing, have a solicitor and building surveyor picked. Get life cover lined up now.

Go to the EA on a thurdsay or Friday and make an offer, gives the owners the weekend to think about it. Let them know you can close the sale quickly, have your check book and offer to write them a booking deposit, that will have them chomping at the bit, its refundable anyway as no contracts as signed, and till the offer is accepted they won’t accept it. But it will mean the EA is working for you now

I agree. I was involved in selling a house last year…a cash buyer came forward immediately, the EA advised that their offer was too low and sure enough an approved mortgage buyer stepped in with €100,000 more…the EA also advised that the provenance of the cash being offered by the cash buyer would have to be fully legit…

Do you really need to spell it out to the EA they should know this ,its their job. I have been in a position to buy for cash for the last 12 months, ( real cash, earned , tax paid, no mortage, kind of cash, can prove where it came from) and I can't even get some EAs to answer my emails. I find it hard work to try and invest in the Irish property market, spent many years in London investing in the 90s where EAs would at least take you serious. Until there are fire sales here things won't change, Move over Allsop we need Barnard Marcus here.

</rant on>

a guaranteed way to piss off the EA. You’re over analysing - just tell the EA you’re a (almost) cash buyer. You’ve €180k with an asking price of €220k. If the property is anyway close to Dublin and recently on the market, the chances are that the asking price should be close to the current market value (ie, what it should make if offered for sale), and you will, in all likelyhood be out-bid. What you’ll probably end up doing is assisting the EA in starting the bidding and strengthening her position by baing able to say to other bidders that she’s already refused “offers”…

Do you really need to spell it out to the EA they should know this ,its their job. I have been in a position to buy for cash for the last 12 months, ( real cash, earned , tax paid, no mortage, kind of cash, can prove where it came from) and I can't even get some EAs to answer my emails. I find it hard work to try and invest in the Irish property market, spent many years in London investing in the 90s where EAs would at least take you serious. Until there are fire sales here things won't change, Move over Allsop we need Barnard Marcus here.

</rant on>
+1
We are the same. We are genuine cash buyers for 3 years…sold at the peak and returned to Ireland to try and buy a family home…we have been ‘outbid’ 3 times…alot of skullduggerry going on…its who you know I think

In my experience, pick up the phone. Always. Engage. Emails are a waste of time.

EA’s are sales people. Any sales person who wastes time on email does not last very long. Use email only to confirm in writing what has been discussed, or pass documentation between you.

To other poster, I agree, never piss of the EA. They are your connection with the seller. You want them to represent you and your bid in the best light possible.

A note on that - what you are most often up against is not the EA. Rather you are up against the buyer’s expectations. That is why an EA will often ignore the low bids. They know from knowing their client, that they will not entertain such an offer.

So, *if you are going in low, you need to help the EA to sell your offer to the seller. *All the EA is interested in is a successful sale. If the EA trusts that you can come up with the money quickly and close the sale without fuss and thus speed up their commission, they are on your side.

True, if there are many strong bidders, and there are zero concerns about the house, then having cash does not offer much of an advantage.

But if any of the bidders are any way untrustworthy in the EA’s mind - for example they need to sell their own house first, or do not represent themselves well, then you may be able to represent yourself better to gain an advantage.

Similarly, if there is something about the house that you can find that might raise some concerns, like building issues (cracks, drainage, etc.), or planning issues, then again, you can use those to your advantage and try and take the field all to yourself.

As another poster mentioned, yes, EAs are highly skilled negotiators. That is why they want to meet potential bidders. Gather emotional intelligence, work out what is your position and how much money might they be able to get out of you, etc.

I still maintain putting your offer in the form of a very polite formal letter, setting out the terms of your offer, and why you believe it is a fair price to offer, and the advantages of your offer, etc, is a good tactic. At least the EA can say to their client, well I have one serious bidder, although they are coming in a bit low, or whatever. Rather than trust the EA to represent you to the seller, you represent yourself, in the way you wish, directly to the seller. It helps slow things down too, which is all to the good. Also helps you maintain more control over the process. Sure, EA’s would prefer you don’t do it, but be very polite and firm. You are making a serious and substantial offer, and you have the right to make your offer in the manner you think most fitting.

Later on, when you put another bid on, if you think you need to, you are positioned in the sellers mind… and if other higher bidders are weak, or fall through, the one ‘serious’ buyer left there is you.

I agree though, with cash, you ought to be looking at places with fewer potential bidders, potential problems, etc. to make the most of the cash advantage.

What is to stop people saying they are cash buyers and then the mortgage only comes out once the sale process has been underway for some weeks? Does your solicitor have to prove to the other solicitor that you are a cash buyer? I’m sure people lie about this all the time. I don’t see the point of sinking your cash into a house instead of using a mortgage for part payment…

Bit like “well the 6 heavy pigs we talked about aren’t so heavy yet, but I’ve got them all named, happy in muck, and I’m feeding them well; so by the time we come to closing they’ll be just the weight you like them (no more, no less)”

Disagree. The house I’m sitting in while I type this, of which I am now the proud owner, was purchased on foot of an offer sent by email. It was a long-winded letter detailing my reasons for arriving at the offer amount using various metrics and I understand that email was instrumental in persuading the vendor’s bank to agree to the sale at a loss. There was some follow up on the phone with the EA to get it across the line but the email was a useful addition in my experience.

Can we FOI? :smiley:

No. The bank in question was BOI which isn’t (technically) state owned. :wink:

You could gift pinsters a template. Might get the morkesh moving… 8)

I hardly think it’s the magic key that will unlock the morkesh :wink: but it might be useful to someone. I think I posted a redacted version already some time ago. I’ll try to find it.

I found the redacted version on my computer but it looks like I never actually posted it on here as it’s not showing up when I search any of the key terms.

‘Xxxxxx’ represents the name of the house and Yyyyyy the name of the neighbourhood.