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Is It Preferable To Buy In Cash? Can It Help To Lower A Price?

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Hello there and thanks in advance for all of your expertise. I am a first-time buyer and have the cash in bank. It seems that this is preferable and might help to make an offer more attractive. I see the posts such as "how to buy..." etc. which give good advice. We spoke to an agent who said it didn't matter at all if we are paying cash. Is this just her part of the game? Are there things we can reference to show her we know that's not true? I hate playing games, but don't want to get ripped off.

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Hello there and thanks in advance for all of your expertise. I am a first-time buyer and have the cash in bank. It seems that this is preferable and might help to make an offer more attractive. I see the posts such as "how to buy..." etc. which give good advice. We spoke to an agent who said it didn't matter at all if we are paying cash. Is this just her part of the game? Are there things we can reference to show her we know that's not true? I hate playing games, but don't want to get ripped off.

You are just about to become involved in bargaining over a transaction that is likely to be for hundreds of thousands of pounds. You will have to learn to enjoy playing games. There is a lot of money at stake and no one with any brains is going to be "nice" to you if they think they can get another 40k out of you.

This is part of her game. No point showing her anything as she already knows the score. Cash buyer means you do not form a link in a chain and there is no chance of a mortgage being refused at the last minute. This means you are good to proceed with no problems, i.e. an attractive buyer and in a depressed market you should be able to leverage that to get a better deal than someone in a chain 6 houses long. Whatever you do, do not tell the EA how much cash you have, as this information will be passed onto a seller. If they want 200k and you offer 170k whilst the agent knows you have 250k in the bank, how do you think that bargaining is going to go? On the other hand, if the agent doesn't know how much you have, then an offer of 170k may very well be your "best possible offer."

Myself, I'd probably wouldn't let on that I was a pure cash buyer as it would be used by the agent ot push you for more...perhaps even to the point of them trying ot get you to get a small mortgage for the "house of your dreams."

Sadly, with most sellers and agents you have to play games or pay more than you need to. Buying a house is not like shopping at Tescos. It is more like shopping in an Egyptian bazaar. Bargaining is part of the game and that requires you keep some of your cards close to your chest, whilst revealing other bits of information. e.g. whilst it would be good for the seller to know you aren't part of a chain and wouldn't be relying on an unobtainable mortgage, generally it would be a bad idea for the seller to know your exact cash position, or exactly how much you "love" the house in question. That information can and will be used to screw more money out of you. The EA is the agent for the seller. Always remember that. If you wouldn't want the seller to know something about your bargaining position, then don't tell the EA.

Do not believe anything that the EA says about the existence of other buyers interested in the house or offers that have been made recently or in the past. They may or may not exist or be true. For example, my reaction to an EA coming back at me with the information that a new buyer had appeared offering 20k more than me, especially if the house had been on the market for some time, would be to say "okay, they can have it. " You may very well find that the new buyer disappears a couple of weeks down the line.

Having said that, the EA's position is not necessarily perfectly in line with the sellers, as perhaps it was in 2006. Now they also need turnover as houses no longer just sell themselves, so it may not be in their interest to attempt to squeeze every last penny out of you in case you walk, but from what I have seen the realisation that there has been a shift in their interests takes time for newer EAs to understand.

Also remember there are many more houses just as nice as the one you are looking at, so be prepared to walk away if a negotiation is not going in your favour. The most important rule about bargaining is that if you are not truly prepared to walk away, then you will end up on the worst end of a deal. From the converse position, this is why properties with sellers under financial stress or similar are opportunities for a "bargain." Patience is a virtue. Never seem too desperate or too keen, otherwise the EA will have a conversation with the seller, "well, they have offered 30k less than you were asking but Mrs. HH seems to think it is the house of her dreams and is likely to bully Mr HH into at least another 20k." You get the picture. It is all common sense really.

A corollary to this is always try to have a couple of options on the go. This will stop you focussing and obsessing on a given house. This, by the way, is also the sort of information that it would be good for the EA to know. S/he then knows that you have other options in mind which strengthens your bargaining position.

Edited by Tiger Woods?

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The simple answer is - yes. You have the finance in place and chain-free, I presume?

You are in a stronger position than 99.9% of buyers. Never let on what your maximum limit is. A search price range is fine. Always look at places a bit above your top limit. Remember that the EA is acting on behalf of the vendors and their own interests - they couldn't give a stuff about you - they just want as much cash from you as possible. Ask their advice and be diplomatic but take everything they say with a big dose of salt.

Buying a house is an asset exchange - they have something you want & you have something they want (lovely money).

Never be drawn into a bidding war or 'competition'. Always be willing to walk away if agent playing hard ball. The phrases - 'I can go to this much but no further' or 'best & final offer' highly underused. Never offer more than you are happy with.

You will need to feel strongly about a property to want to buy it but if it's not working out, there is always another one around the corner.

Another thing - don't question what the agent tells you - just smile sweetly. No point questioning or 'referencing' to show what she says is incorrect. They really don't care. Just look at properties, ask questions, do a lot of your own checking out, and make offers as you see fit.

Courage, mon brave!! & Good Luck x

Edited by luckygirl

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Beware of telling any agent that you are a cash buyer in the first instants.

William h brown asked us as cash buyers to prove it by showing them our bank statement!

Just say you have your finances arranged, and get yourself a solicitor in place, that way if they ask for proof you could get your solicitor to confirm you have the money, without showing them all.

I believe that you are in a very good position and can bargin considerably.

What about taking along with you a more experienced friend or relative, who understands more about the buying process? That way you wouldn't feel so under pressure.

good luck, go for it and bargin. B)

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Beware of telling any agent that you are a cash buyer in the first instants.

William h brown asked us as cash buyers to prove it by showing them our bank statement!

Bank statement??? Was the purchase price less than £50k, or were they expecting your money to be held both at no interest and without savings protection?

Do we not allow the possibility of being a cash purchaser on the basis of raising the cash by disposing of liquid assets?

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Hello there and thanks in advance for all of your expertise. I am a first-time buyer and have the cash in bank. It seems that this is preferable and might help to make an offer more attractive. I see the posts such as "how to buy..." etc. which give good advice. We spoke to an agent who said it didn't matter at all if we are paying cash. Is this just her part of the game? Are there things we can reference to show her we know that's not true? I hate playing games, but don't want to get ripped off.

Why use cash when you could spread the risk on to a bank as well? This would then leave you some cash to invest in your future or to improve the house. An offset mortgage would let you have the best of both worlds.

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yes, i am serious william h brown in brandon, suffolk asked to see our bank statement ! :angry:

thats why i said , if this happens to you don't give out the information, let your lawyer confirm.!!

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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