Paying for property in cash?

heybaby

Spotted a two bed house I like, asking price is 250k, it needs work on it I estimate 30k. Its a two bed but a bigger house with 5 beds in the same locale sold for 300k recently and a smaller house again 2bed sold for 200k last week. I think the 250k they are looking for is too much all things considered, and factoring in the fact that the market is in freefall, I am looking to offer a figure below 200k.... especially as I will be paying in cash, how much below the asking price is acceptable to offer when paying in cash for a quick purchase? the property itself has only been on the market 3 weeks.

the_syco

€180k. Who cares what Mary down the road bought their house for last year. They not have haggled?

Victor

A cash buyer will only get a modest discount to any other buyer and is only useful to someone who needs cash immediately.

Ray Palmer

Cash really makes little difference. The only thing that is really smother is that it will be a little quicker.

mrgaa1

All that cash can do is lower the "legal" price - i.e. what is signed into the contract. The owner would probably take some cash in an envelope, drop the house price by a bit and the rest the solicitor will have to see.
Cash, unfortunately, is not King anymore.

Treehouse72

mrgaa1 wrote: »

Cash, unfortunately, is not King anymore.

Tell that to people who can't get a mortgage.

okedoke

I presume you don't actually mean "cash" - you have the funds to buy outright?

Cash is king - if two buyers make an offer - a cash buyer offers €200K "take it or leave it" - and a buyer who is selling another house/getting a mortgage offers €220K. I would be surprised if the vendors didn't go for the certainty of cash given how many mortgage approvals are being withdrawn before draw down (anecdotal evidence).

To maximise the impact of cash you should make an offer with a very tight time limit (e.g. a week) - so the vendors can't use you as a back up to a mortgage/chain buyer.

antoinolachtnai

Having 'cash' to buy a house is nothing to do with briefcases or brown envelopes. It just means that you have the money ready, on-hand to actually do the deal. You don't need to sell another property or get the bank's approval.

You will get a better deal for the above.

Paying for a house with actual folding readies is a big no-no. Do not do this.

Tigger

why?

antoinolachtnai

For a start, there is the money laundering laws. Your solicitor will not accept the cash unless you are able to account for it. Even if he does accept it, the other side's solicitor will not take it unless he thinks it can be accounted for. Equally, when the money is brought down to the bank, the solicitor or the client will have to confirm that everything is legit.

Secondly, there is the handling of the cash. Solicitors do not have cash storage or transport facililities.

For these and other reasons, when cash is involved it is because solicitors have been cut out of the loop. Doing a property deal without your solicitor on board and fully understanding what is going on is a really bad idea. There is a very significant possibility that you will end up without either your cash or proper title in your house, or that you will face a fine from the revenue later on for not fully declaring the transaction. For example, the vendor might take the money, and then deny that he received the money, or accept they had received the money but say that the money was a deposit or up-front rent payment, or some other story.

Even if you deal in cash in every other area of your life, you need to do a property transaction properly, through your bank and your solicitor. It is too big a risk to take not to.

leeroybrown

If you mean "cash" as in you've got the money in an account and can draw it down or transfer it in the morning then it'll give you a negotiating advantage if there are other offers available or if the vendor wants a quick sale. Property deals involving two house sales can drag on for months in the current climate and often eventually fall through. Make an offer with a firm deadline for acceptance being extremely clear that the funds are immediately available. This is the situation I presume you mean.

If you mean "cash" as in cash in hand then you're running into trouble with money laundering legislation and no one will touch it.

heybaby

I dont literally mean cash as such, i have legit funds in place and obviously intend to use a solicitor, everything is above board, I was just wondering if I could use the fact that I dont need mortgage approval to aquire the property at a discount.

antoinolachtnai

Yes.

Let the estate agents know you are a cash buyer. Do not say 'can pay in cash' - that sets off bells. Don't bother with string deadlines or any of that.