Offering cash!!

crimebuster · 13-02-2015 4:21pm #1

Just a general question,
Say someone offered cash for a bank owned property to auctioneer when they didn't have cash (needed a loan) what would be the problem? Saying that loan is ready to go and everything.

by the seaside · 13-02-2015 4:40pm

That someone would need a good plan for when the auctioneer asked to see bank statements showing evidence that the someone had the cash.

ted1 · 13-02-2015 5:01pm

While you may think everything is in order , the bank may choose not to release the money.
Cash usually means a quick sale. The correct could state this and often Includes penalties for not closing on time.

crimebuster · 13-02-2015 5:16pm

Has auctioneer any legal standing on this? Surely it's up to solicitors to sort this out. Ie loan approved and ready to go. Is it not any business of the auctioneer where the money came from to buy the property?

ted1 · 13-02-2015 5:19pm

crimebuster wrote: »

Has auctioneer any legal standing on this? Surely it's up to solicitors to sort this out. Ie loan approved and ready to go. Is it not any business of the auctioneer where the money came from to buy the property?

He represents his client, he advises him and if he is telling his client that the guy has money and it'll be off you hands in2 weeks he needs to make sure that what he is saying is the truth.
The word due diligence comes to mind

As I said before. Banks don't always give the money, there could be a boundary issue, the survey could show something or you could be paying to much.

crimebuster · 13-02-2015 5:22pm

But if you have loan offer statement any ready to draw down is it not the same? Correct me if I'm wrong but is it not the job of auctioneer to sell property ie take bids and show property and anything to do with contract is job of solicator

P. Breathnach · 13-02-2015 5:37pm

crimebuster wrote: »

But if you have loan offer statement any ready to draw down is it not the same? Correct me if I'm wrong but is it not the job of auctioneer to sell property ie take bids and show property and anything to do with contract is job of solicator

If that's all an Estate Agent does, is there any point in telling him or her a lie?

An EA, before recommending an offer to the client, might ask for proof of funds. The vendor might prefer a genuine cash offer, because there is less uncertainty with it.

L1011 · 13-02-2015 5:38pm

crimebuster wrote: »

But if you have loan offer statement any ready to draw down is it not the same?

Nowhere bloody close.

Cash = can close in days, if the sellers side is ready
Loan "ready to draw down" = its going to take weeks, no matter what you imagine currently. Bank will need to reissue documents with the correct address, get assignments for life and house insurance, etc, etc, etc.

If you do this, don't be hugely surprised if the vendor pulls out seconds after your solicitor tells theirs you don't actually have cash.

Dr Strange · 13-02-2015 6:03pm

L1011 wrote: »

Nowhere bloody close.

Cash = can close in days, if the sellers side is ready
Loan "ready to draw down" = its going to take weeks, no matter what you imagine currently. Bank will need to reissue documents with the correct address, get assignments for life and house insurance, etc, etc, etc.

If you do this, don't be hugely surprised if the vendor pulls out seconds after your solicitor tells theirs you don't actually have cash.

The bank will also send out someone to do a survey for valuation of the house. If I was the seller and had been told that the buyer is a cash buyer who can close quickly and I then hear from either the EA or my solicitor that a bank is sending someone out etc. I would probably instruct my solicitor to disregard the offer and go with the next best cash buyer if that's what I was looking for.

Balmed Out · 13-02-2015 7:17pm

Am I right in thinking you plan on getting a personal loan rather then a mortgage?
Why? Typically you wont get a massive amount and the interest is far higher. If the reason is there's some sort of issue with the property that would mean a bank wont give a mortgage on it then id imagine yould need something as security?

davo10 · 14-02-2015 8:46am

Sellers will often accept a lower cash offer than a higher mortgaged offer because transaction is quicker, less hassle and less likely to fall through. You may have mortgage approval but the bank still has to decide if they will allow you to draw it down for that particular property.

If you have a "cash" offer accepted and then start messing the EA/seller around, expect to get the big PFO, you will be down money from survey and solicitors fees. The EA will know you as a dishonest bidder in future, this may make no difference to you at all unless the next property you really want is being sold by the same EA.

But the question is, why did you claim to be a cash bidder if you are not? The only answer is to get a bid accepted by deception.

Balmed Out · 14-02-2015 10:41am

davo10 wrote: »

But the question is, why did you claim to be a cash bidder if you are not? The only answer is to get a bid accepted by deception.

Id imagine there is an issue with the house whereby it was built not in accordance to planning permission and as a repo rather then going for retention and then selling it the bank are selling as is so it would only be available to those who can pay cash and not be relying on getting a mortgage.

davo10 · 14-02-2015 4:41pm

Balmed Out wrote: »

Id imagine there is an issue with the house whereby it was built not in accordance to planning permission and as a repo rather then going for retention and then selling it the bank are selling as is so it would only be available to those who can pay cash and not be relying on getting a mortgage.

The OP said he/she offered cash, not that it was for sale for cash only.

the_syco · 15-02-2015 7:46pm

crimebuster wrote: »

Say someone offered cash for a bank owned property to auctioneer when they didn't have cash (needed a loan) what would be the problem?

By "didn't have cash", do you mean didn't have any cash, or had 85% of the cash, and the loan was for 15%?

BnB · 17-02-2015 11:22am

L1011 wrote: »

Nowhere bloody close.

Cash = can close in days, if the sellers side is ready
Loan "ready to draw down" = its going to take weeks, no matter what you imagine currently. Bank will need to reissue documents with the correct address, get assignments for life and house insurance, etc, etc, etc.

If you do this, don't be hugely surprised if the vendor pulls out seconds after your solicitor tells theirs you don't actually have cash.

Just to be clear.

All of the above is true if the "loan offer" that the OP is talking about is a mortgage or some other type of loan that is secured on the house.

But if the loan is an unsecured term loan then as long as you can draw it down quickly then there is no issue. If you turn up with a cashiers cheque (or a ball of notes) then the buyer doesn't care technically where you got it from - to him it's cash.

If it is actually a mortgage, there is a good chance that the seller will tell you to stick it.

Eric Cartman · 17-02-2015 1:06pm

BnB wrote: »

Just to be clear.

All of the above is true if the "loan offer" that the OP is talking about is a mortgage or some other type of loan that is secured on the house.

But if the loan is an unsecured term loan then as long as you can draw it down quickly then there is no issue. If you turn up with a cashiers cheque (or a ball of notes) then the buyer doesn't care technically where you got it from - to him it's cash.

If it is actually a mortgage, there is a good chance that the seller will tell you to stick it.

if the loan is unsecured the money should be deposited in a bank account and when the EA asks to see a statement , the balance at the end would be like having the cash, so no issue there.

Eldarion · 17-02-2015 3:14pm

Eric Cartman wrote: »

if the loan is unsecured the money should be deposited in a bank account and when the EA asks to see a statement , the balance at the end would be like having the cash, so no issue there.

This wouldn't be "like" having cash, this would just be cash no question.

If this is the case then OP should stop wasting everyone's time with the whole "loan offer"/"ready to draw down" nonsense and just provide the bank balance statement with the figure prior to any further discussions.

But this is quite obviously not the case and it's simply that the OP doesn't like being discriminated against for not being a cash buyer.

davo10 · 17-02-2015 4:29pm

Just in case anyone is in any doubt, when making a "cash offer" you are making an offer using money you have on deposit in an account, your own money independent of approval from any lending institution. It is the preferred offer as far as the seller is concerned as there isn't a third party who could potentially through a spanner in the works, it is quick and in most cases a clean transaction.

If you are reliant on receiving any portion of the offer from a lending institution then it is not a "cash offer" regardless of whether you have approval from the bank. The bank still have to approve the drawdown subject to the property satisfying their criteria to do so. Hence more risk of the proverbial spanner in the works and the reason sellers don't favour this type of offer. OP if you aren't bidding the full amount of your offer with your own money, it is not a "cash offer" so you may get the big PFO if you have misrepresented your position and the seller is peed off.

bulleyes · 17-02-2015 4:39pm

Never show an EA your bank statement. They dont work for you and have no right to look at your bank statement or to know how much you have in your account. Your bank balance is your business not some sales person whos trying to get as much money off you as possible.

Most bank sales of properties will require proof of funds. This is easly provided by a letter from your solicitor or accountant and should simply say Joe Blogs has access to X amount to purchase said proprety.

Offering cash!!

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