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Original poster

Cash buyer or investor-which buyer to choose?

29 replies

Sweett00th · 15/09/2020 10:30

We have two good offers on our flat, one cash buyer and other investor and whilst above flat is tenanted I’m tempted to go with investor but worried they could pull out. Whereas the cash buyers are downsizing so they would be living here, which would you consider?

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Original poster
Sweett00th · 15/09/2020 10:31

I guess I’m worried either could pull plug quite easily 🧐

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Bells3032 · 15/09/2020 10:51

Are the cash buyers actually cash buyers? I've heard this a few times where they claim to be cash buyers and then get a mortgage anyway.

I'd go with the investors if tenanted. Means you don't have to evict the tenants (you currently have to give six months for a S21) so if it falls apart you lower your risk

Original poster
Sweett00th · 15/09/2020 11:33

Thanks, at present we live I this flat whereas flat above us is tenanted. I’m thinking maybe more sense to go with investor so they rent this place out, just going investor doesn’t drop rice if I go with them.

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Hoppinggreen · 15/09/2020 11:35

If the cash buyer is genuine then I would go with them on the basis that if they live the flat and want to live there they might be more motivated than an investor.
No expert so could be totally wrong though

Bells3032 · 15/09/2020 11:38

Oh completely misunderstood you. i thought your flat was tenanted. I would go with the cash buyer then...as the person above said they probably would have more emotional attachment to the flat and less likely to pull out or drop the price - plus mortgage companies are pulling down offers left right and centre these days.

I don't know what the flat above being tenanted has to do with anything

Original poster
Sweett00th · 15/09/2020 11:46

Thanks everyone, now I just have to find somewhere!

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Reddog1 · 15/09/2020 11:54

The investor might change their mind if something else comes up and they’d have no qualms about pulling out of the purchase.

I’d accept the cash buyer ....but on the basis that they’re genuinely that (estate agent must establish).

sunshinesupermum · 15/09/2020 12:05

Cash buyer as long as there is proof they have the funds. I woudn't trust investor not to try and drop price offer or find something that's better investment.

Original poster
Sweett00th · 15/09/2020 14:20

Looks like cash buyer has ftb buying their house so will be cash sale.

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JoJoSM2 · 15/09/2020 15:25

Cash buyer sounds much better + it’s nice to sell to someone who wants to live in the property.

Original poster
Sweett00th · 15/09/2020 15:47

Thanks

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KoalasandRabbit · 15/09/2020 15:53

So has the 'cash buyer' still got the sale of their house to complete? If so they aren't a cash buyer and they are in a chain. If so would go with investor.

If the cash buyer's house sale is complete and they have evidence they have cash now would maybe go with cash buyer.

Ponchy · 15/09/2020 15:56

How fast can the investor exchange? Your "cash buyer" is not a cash buyer if they need to sell their own property first. They are in a chain but won't need a mortgage once their sale goes through. Your estate agent shouldn't be calling them a cash buyer.

Original poster
Sweett00th · 15/09/2020 16:20

I guess cash buyer as no mortgage hence confusion. At present their first time buyers have started searches but buyers have offered considerable amount now vs investor

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Reddog1 · 15/09/2020 18:28

When I replied earlier, I thought that the “cash buyer” was chain-free or didn’t need to sell their home in order to buy yours. The presence of a chain muddies the waters and I’d be inclined to go with the investor unless the “cash buyer” had offered substantially more. FTBs can be as fickle as investors in my experience.

YellowNotRed · 15/09/2020 18:37

I would definitely go with the investor. No chain, and less worried about survey results etc as it wont be their home.

The 'cash' buyer is NOT a cash buyer if they need to sell their home!

mumwon · 15/09/2020 18:54

agents "sell" someone as ash buyer when they have to either sell property or get mortgage -a cash buyer should be someone who has the cash in the bank (investment or whatever)that is ready to instantly transfer over to the new house as soon as paperwork goes through.
Be aware that investment buyers also may need to get mortgage & get turned down the same way as first time buyers. Also investment buyers can at the last minute (exchange) decide they want/need to reduce offer - but canny first time buyers can do this too.
So state categorically that if someone does try this at the last minute you will pull out (obviously if surveyors report shows something negative or mortgage offer is lower you will have to be a bit more flexible)

mumwon · 15/09/2020 18:54

doh not ash buyer - cash buyer!

WombatChocolate · 15/09/2020 19:11

Just check you understand the key terms and the benefits and disadvantages of each.

Cash buyer - has all the money up front and does not need to sell anything or get mortgage to buy. Therefore, not subject to a chain.

Investor - buying not to live there themselves. Might be a cash buyer investor or getting a mortgage. Usually chain free and not requiring the sale of something else to buy yours.

Speak to the EA to establish the exact financial positions of both buyers and ask if they have seen evidence. Even if you accept an offer, do not agree to withdraw from market or mark as sold subject to contract UNTIL financial position has all been evidenced. Too many people think they are cash buyers or tell EAs they are, when in reality they aren't.

I'd say a genuine cash buyer is best...but yours doesn't sound like they are. An investor who is also a cash buyer might be best of all, but more likely to pull out if you can't proceed quickly...and if you've got to find somewhere and get a mortgage and be in a chain etc etc you won't be very quick...not a lot you can do about that.

Be very clear about the position of both buyers before accepting either.

Original poster
Sweett00th · 15/09/2020 20:11

The non investors are selling and under offer to ftb, once sold then cash buyer. The investor will need to get mortgage

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CatAndHisKit · 15/09/2020 20:30

I'd go with 'cash from sale' buyers, even thogh ther is a slight risk their ftbs might pull out (they can find other ones quickly probaly). If they want to live in the flat, they aer more commited.
I had an investor pulling out after giving promises for weeks of starting the process, apparently couldnt get the funds in the end.

JoJoSM2 · 15/09/2020 20:46

Does the investor require a mortgage?

Being in a chain is not ‘cash buying’ so they’re in a much weaker position given the facts.

sunshinesupermum · 16/09/2020 11:44

If the investor needs a mortgage they will likely take as long as the cash buyer who has a FTB lined up. Who has offered more?

Original poster
Sweett00th · 16/09/2020 11:58

I’ve decided to go with the “cash buyer” who’ve offered more.

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positivelynegative · 16/09/2020 12:57

By this analogy, everyone is a cash buyer, it’s cash from a sale, mortgage, family loan, whatever. Unless the cash is already sat in a bank somewhere it makes no difference.

What matters is chain or no chain.