Who are all these cash buyers???

[sweetpaws]

Trying to move house but can’t get a look in because we constantly seem to be up against cash buyers?? Who are all these people with so much cash?

*Regarding being oroceedable…it’s not the same thing. Being proceedable, for someone who needs to sell property means the following;

• having accepted an offer in your own property and that buyer has shown they have the funding and/or their own buyer who is proceeds left
• any necessary mortgage finance is in place in principle and in writing
• solicitors can be named
• EA has checked proof of funds - that is deposit, mortgage offer in principle and also any buyer.*

This was kind of my point. Who on earth would be in this position before they've even been to view a property, which is what my local estate agents seem to expect before they'll let you have a viewing

Frangipan, you can get in this position. It requires planning ahead.

• getting own property ready for marketing and then putting on market
• applying for mortgage in principle
• looking around and choosing solicitor.

Your do all this and get a buyer. So quite simply you do all this and only THEN do you start looking.

Hopefully the people who will have looked at yours already have a buyer…so you took them seriously. It works the same for you.

So no, there’s no deciding you fancy moving and going and looking at properties 2 days later. It’s a bit more long term planning than that. If you want to move, work hard at getting the property ready and on the market. Work hard at getting a mortgage offer. Until then you’re not proceedable and essentially a ‘time waster’ in terms of viewings.

It takes people a lot of work to get their house ready for a viewing. They do t want people who spend their weekends viewing without ever intending to move….and unless people are proceedable, you will get lots of those who just are serial house viewers. Especially in a ‘hot’ market, letting the unproceedable people view, means those who genuinely can move might not get a slot and therefore go elsewhere.

So you can get oroceedable. It doesn’t have to take long.

As I said earlier. We are using a bridging loan and put ourselves as cash buyers. We didn't put an offer in and then start looking for a loan.
We don't need to sell our house to buy.
The estate agent wanted to see all of our proof of funds before we could even view the property.
We had everything in place to proceed.

@WombatChocolate

Lots on here describe themselves as cash buyers….but they aren’t.

Cash buyers are those with the ready cash available to buy with and. It dependent on a sale.

Those with huge equity which means they won’t need a mortgage, but they need to sell their existing property to free the equity are NOT cash buyers. They might be in a. Stronger position (or not) than those needing to sell but they aren’t ash buyers.

In my mind, buyers’ attractiveness usually ranks in this order;

1. True cash buyer - no need to sell anything and no need for mortgage
2. First time buyer - needs a mortgage but no need to sell - therefore end of chain.
3. Owner buyer who needs to sell current property and get a mortgage.

I’m amazed how many describe themselves as cash buyers in life and on this thread who absolutely aren’t. The Q is, can they hand over the cash today, or perhaps in a week or so, without needing to sell property to access it. I’d describe a cash buyer who might need to access some savings in notice accounts of up to a month, but beyond that, any illiquidity which means the money isn’t available, or is dependent on a sale (worse still in my mind.llsubject to so many things that can go wrong) then they are not a true cash buyer.

It’s why EAs tend to ask to see proof I’d funds now. So many buyers made offers as cash buyers, but further down the line it turned out they needed a mortgage or actually needed to sell property to free up cash. The EA wants to see bank statements or other financial statements to show ready cash that’s available,

Quite. Our HA told us our last buyers had sold their property to a 'company' and therefore were 'as good as cash buyers'. Which turned out to mean 'they are selling to first-time buyers who are going to be a classic FTB pain in the arse'. I.e., it was what's generally known as 'a right pack of lies'.

We were cash buyers for this house, as in, we had full amount in our various accounts ready to hand over, nothing to sell, no mortgage, no lender to please. And our solicitor had to prove all of this to the HA before they would advise their clients on our situation. Which is as it should be.

@WombatChocolate Wrong. We would sell our existing home first as it is in a different country to the UK. So yes, we would indeed be cash buyers in the most literal sense because we would have that money sitting in an account. The OP’s question was (I think?) how people accrued the money to buy a house outright in the first place, and one answer is that a lot of buyers acquired the money via home equity gains in more expensive areas.

Misty. Not sure what your rather blunt WRONG refers to.

Yes, of course if someone sells first, then they would have the cash and assuming it is enough, that would make them cash buyers. I can’t seen any disagreement between us on that. Sometimes people think they are cash buyers as their current property has enough equity in it, to not need another mortgage when they sell and buy….but they plan to buy and sell as part of a joint transaction, and then they aren’t cash buyers, because they don’t have the money upfront.

I thought the Op was asking as she replied directly to my description of being proceedable) and how people ever satisfied EA requirements to view. In her mind, she seemed to want to view BEFORE having a buyer or mortgage in place, and thought that was reasonable.

When you have only been on the housing ladder for a short while it’s very hard to imagine ever becoming a cash buyer….and clearly lots of people never do. But yes, you’re right, that increases in house. Aloe which build equity is a key way people do. Those who downsize when retired can often sell a larger house and move into rented and find they have far in excess needed for a smaller property. Investors might have cash available from other investments and some people just accumulate large amounts of savings. Cash buyers tend to be concentrated amongst older buyers and investors who buy properties to rent out.

I'll be a cash buyer when I move... sorry

Trouble with renting is house prices continue to go up.

Round me that s about 7k in 6 months.

Wombat, it was in response to your equally blunt, “Misty, you are not a cash buyer”. The statement was incorrect. I was just pointing it out. 🤷‍♀️

We are indeed on the same page in regards to what cash buyer actually means though.

Aah yes Misty….looked back at your original post and then reply to me.

In your first you referred to equity in your property, but not that you would be selling FIRST to free the equity. Your first post sounded like the typical purchase of buying and selling at the same time (you referred to both selling and buying…not to different times scales for the 2) but in your second you clarified, to say you’d be selling first to free the equity.

Lots of people with all the equity they need in their property do try to claim they are cash buyers, when in actual fact they are reliant on the sale completing in the same day as their purchase to free that equity…when of course they are not.

I’m sorry if I was blunt…..the thread was taking a turn where the definition of cash buyer was becoming more and more confused and your description of your situation didn’t make it really clear that your equity would already have been released, so I thought people’s understanding would get further confused.

Glad to see though, that we agree about the definition and that at least there are a few on here who understand what a cash buyer actually is. All the confusion that has come out, does offer some kind of explanation towards why so many sales fall through and aren’t what people are thinking when they accept an offer.

If I were selling, I would be checking my EA was checking any viewers were proceedable and if they said they were cash buyers, that this had been checked via proof of funds.

I was mortgage free when I sold my house and rented for a year. I put the house sale funds into NS&I while I was house hunting. Lots of downsizers I know doing the same over lockdown, but not everyone wants a chain free cash buyer as they can be impatient.

True. Not everyone wants a cash buyer as often they can push their advantage (in terms of less liklihood of a chain collapsing) and demand a lower price.

Some people like to ‘like’ their buyer or to imagine them living in the house….that might not be a cash buyer, especially if an investor.

Cash buyers have been popular with the stamp duty holiday. People had a timeframe to work to and collapsing chains (happened a lot due to people’s mortgage finance falling through) were a risk they couldn’t face as they’d miss the stamp duty deadline. So the cash buyer was popular (if a genuine one) as completion dates could be controlled more easily.

I think it’s true there are a number if cash buyers out there in rented, who ended up there during the stamp duty holiday for various reasons. In the future, especially as the market slows down, there won’t be so many.

Plus, when the market slows down, skewers are in a weaker position. More have to sell to non- ash buyers and actually, when markets are slow, EAs will be willing to show to people who aren’t proceedable yet, simply because they need to be able to say they’ve provided some viewings. The state of the property market can make a big difference to all this.

Yes, you are right that it is interesting how the definitions seem to vary! It honestly never occurred to me that people would call themselves cash buyers if they didn’t have the funds ready to go in a bank account. I hadn’t read the full thread so was only answering the original OP about where ‘the people with all this cash’ were coming from. I see now what you were trying to do in terms of clarifying the definition of cash buyer for the thread!

We sold to a 'cash buyer' who was in fact waiting on an insurance company to stump up the cash. It did but it held thing up and was really annoying.

@sweetpaws

Trying to move house but can’t get a look in because we constantly seem to be up against cash buyers?? Who are all these people with so much cash?

Where I am it tends to be London buyers or people who have just retired

People recently retired with private pension can take tax free lump sum out of their pension, so 2 x £500k pensions would bring in £250k sum, add to that the ISA's that older folk often have from over the years and you could have quite a large sum of readys

@User5632986

People recently retired with private pension can take tax free lump sum out of their pension, so 2 x £500k pensions would bring in £250k sum, add to that the ISA's that older folk often have from over the years and you could have quite a large sum of readys

You can take money out of ISAs and if you put it back within the tax year it can stay in the ISA. So someone with an ISA which is their savings to live in in old age (for people like the self-employed who often have savings rather than pensions) they can take it out, buy a house genuinely with cash, then sell their previous house, and put it back when their fist house is sold. Don't knock it, it can help keep a chain intact.