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Original poster

CASH BUYERS

21 replies

Mommasoph30 · 10/04/2017 10:59

Parents selling house soon and they will be 100% cash buyers they are in there 60s. Looking to downsize and be mortgage free.

What fees are you expected to pay when selling house and then Buying with cash ?

I presume the EA fees still stand and Solicitors. Any help would be appreciated.

Say they have £100K cash what will they realistically have after all the fees as they wont need to pay deposit if they paying cash ?

Hope this makes sense.

OP posts:

wowfudge · 10/04/2017 11:06

It will be exactly the same as if they were buying with a mortgage except they will need to arrange their own valuation survey and any other survey they require. They will need to pay a deposit, but if they are in a chain selling and buying at the same time, there is no physical payment of the deposit, it is a paper exercise.

Only once they know how much their house is selling for and what they are buying for can they calculate the actual costs.

Obviously, you can estimate EA costs and solicitor's fees, disbursements and any stamp duty on the new place. You can ring round chartered surveyors and get an idea of survey costs.

Should they sell first and buy at a later date they need to be prepared to show proof of funds to their solicitor to demonstrate they have the money to buy the next place.

wowfudge · 10/04/2017 11:07

Cash buyers still need to pay a deposit at exchange btw.

RedSandYellowSand · 10/04/2017 11:16

The only thing they won't have to pay is a mortgage arrangements fee. But since mortgages often come with basic surveys, they might have to factor this in.
Also bear in mind moving big sums of money sometimes comes with transfer fees.
They WILL need a deposit.
The amount left is so dependant on the sale and purchase price it is impossible to calculate without further info

PoundlandUK · 10/04/2017 11:16

They will skip mortgage arrangement fees and will not be obliged to pay any survey or searches fees unless they wish to do so. Theoretically they can skip building insurance if they are going to buy a freehold property.

However, banks retaining part of the asset through mortgage ask for searches, valuation survey and building insurances for good reason!

Original poster

Mommasoph30 · 10/04/2017 11:26

Ahhh I see

I did't think they would need to pay deposit so thanks for that!
Excuse me but just to clarify house purchase is 100K - pay 10% deposit they then pay for the rest of house with remaining cash?

Im just trying to get as much info to help my parents.

Sound nice to bear in mind,So they won't really save that much money just might be abit easier for them being cash buyers.

They have an interest fee mortgage atm which they wont pay off so ive said sell pay off mortgage and use the rest to pay for house out right so mortgage free and in better position. but trying to figure out the cost;s roughly

Its an expensive game!!!!!!!!!!

OP posts:

CountMagnus · 10/04/2017 11:50

We've just done this:

Selling: estate agent's fee, conveyancing / solicitor's fees

Buying: conveyancing / solicitor's fees, stamp duty (if applicable), building survey (depending on type of property)

Don't skip building insurance, especially if buying a terrace or semi.

10% deposit paid on exchange - if this is done on the same day as they exchange with their own buyers then the solicitors will just arrange this. If they sell first and buy at a later date then they will need to arrange this plus arrange to pay the balance on completion. Bank transfer fees are usually around £20, but can be waived in the banks involved are all part of the same group.

Don't forget to factor in removal costs as well.

CountMagnus · 10/04/2017 11:52

And don't forget any early redemption fees on the mortgage?

RedSandYellowSand · 10/04/2017 11:55

They will need somewhere to rent while they find the new house. That comes with set up fees, deposits, and actual rent - often for a minimum term.

Original poster

Mommasoph30 · 10/04/2017 12:03

why will they need somewhere to rent when they sell? When we sold ours last year we didnt rent we just waited to find the house, took about 4 months from offer to end moving in,
Presume would be the same for parents they sell, they find house everyone moves same day????

OP posts:

CountMagnus · 10/04/2017 12:06

You can get more leverage as a cash buyer if you're not part of a chain, i.e. sell and then either rent or put stuff in storage and move in with relatives,, but if your parents are looking to sell and buy at the same time then this won't apply.

wowfudge · 10/04/2017 12:09

Yes - they'll need to prove they have the funds (if selling and buying at the same time the solicitor will have details of how much they are selling for) and actually pay a deposit of however much is agreed if they have the cash proceeds of sale in the bank.

In practice, many solicitors will want all the purchase monies at the same time in order to ensure their client has the ability to complete the transaction and to be sure they have the funds in time to make the transfer in line with agreed contract.

RedSandYellowSand · 10/04/2017 12:09

Ok, sorry, ive missunderstood.
I take "cash buyer" to mean the money is sitting in a bank account somewhere. So i assumed they would sell, bank the money, and look for somewhere to buy.
You are suggesting a chain sale, but with no mortgage to take out, hence cash buyer. Ignore my renting comment.
If in a chain, the deposit may well be able to be passed along the chain, and they may not need the actual cash up front.

CountMagnus · 10/04/2017 12:13

wow we didn't have to send funds all at once, just the deposit on exchange and the balance a couple of days before completion. We did have to go through all the money laundering checks though.

GloriaGilbert · 10/04/2017 12:16

We've always been cash buyers (by cash I gather you mean not in a chain, but we've also been literally cash buyers) and it just makes you more attractive first to the buyer and then to the seller. I don't think there's much other difference.

Original poster

Mommasoph30 · 10/04/2017 12:18

Oh Brilliant thank you for clarification.

lovely that sounds great then and do able!

OP posts:

CountMagnus · 10/04/2017 12:26

Gloria you're right that in the usual sense a cash buyer isn't part of a chain, but I think OP's parents will still be in a chain, just will be purchasing without a mortgage.

Original poster

Mommasoph30 · 10/04/2017 12:35

Thats correct Sorry my title is misleading

Thanks for the help so far :D

OP posts:

wowfudge · 10/04/2017 12:49

CountMagnus - I didn't say all solicitors would want the whole of the purchase monies prior to exchange. It was certainly in the Ts and Cs ours provided last year.

CountMagnus · 10/04/2017 17:19

wow wanting all the cash in place at exchange wouldn't work if you're in a chain though. FWIW, we were never asked for proof of funds, either by any of the agents that we viewed houses through / offered on houses through or by the solicitor that we purchased through.

wowfudge · 10/04/2017 18:18

But if you are in a chain and need to sell in order to buy and need at least part of the proceeds of a sale in order to buy then you are not a cash buyer, just someone who doesn't need a mortgage.

CountMagnus · 10/04/2017 19:08

Absolutely - OP's parents aren't cash buyers in the usual sense.

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