Cash Buyer

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em_cat

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Hi all, its been a while since I've posted here in AAM so here goes...

I'm in a position to purchase a house. We've found one that literally ticks all of our boxes with the exception that my OH will have to do the same commute he moved to the city to get away from 15 years ago. We also need a very specific type of property as I've medical needs that render 2 up 2 downs unsuitable and we currently live in a multi development apartment that we own, are currently paying 25% towards the capital of the mortgage so will pay it off early I suspect. I currently don't need to work for financial reasons, but would like to volunteer and we've no other high interest debt, clear credit and don't need a mortgage & would be unlikely to get one given my OH is an Architect.

My question is would be silly to offer the asking price simply because I have no interest in getting in a bidding war and we will be paying cash, that we actually have access to, its in a 7 day deposit account.

The asking price is 400K, not many houses go up for sale on this particular road, and the last one that did sold for 725K 5 years ago.
 
If a cash buyer offered me the asking price for my property, Id assume there was more in the tank. There really is no guaranteed way to try and cajole a property sale.

Make an offer of the asking price and let it run its course. From what you say about previous sale prices, that sounds like a starting price.
 
Can you put up a picture of the place and directions to it? Wouldn't mind having a go at it myself. Ah no, but why is a house gone down in value so much in 5 years
 
em_cat said:
Hi all, its been a while since I've posted here in AAM so here goes...

I'm in a position to purchase a house. We've found one that literally ticks all of our boxes with the exception that my OH will have to do the same commute he moved to the city to get away from 15 years ago. We also need a very specific type of property as I've medical needs that render 2 up 2 downs unsuitable and we currently live in a multi development apartment that we own, are currently paying 25% towards the capital of the mortgage so will pay it off early I suspect. I currently don't need to work for financial reasons, but would like to volunteer and we've no other high interest debt, clear credit and don't need a mortgage & would be unlikely to get one given my OH is an Architect.

My question is would be silly to offer the asking price simply because I have no interest in getting in a bidding war and we will be paying cash, that we actually have access to, its in a 7 day deposit account.

The asking price is 400K, not many houses go up for sale on this particular road, and the last one that did sold for 725K 5 years ago.
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If a house nearby sold for 725 k in 2014, how on earth can this house be bought for 400 k?
 
My OH just arrived home so he’s going to look at the planning & apparently the 725K sold last year it was another house that was sold in 2014 at appx 600K.

I suspect it has to do with size, the one we’re interested in only has a shower room & is 90sqm. It does need some work but has massive potential and in an area I like. It had been extended but only 24sqm to the rear & has a clean planning history.
 
LS400 said:
If a cash buyer offered me the asking price for my property, Id assume there was more in the tank. There really is no guaranteed way to try and cajole a property sale.

Make an offer of the asking price and let it run its course. From what you say about previous sale prices, that sounds like a starting price.
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Thanks, I’m not trying to cajole anyone out of a fair price? Just not sure what to do, with that and don’t want to get into a gazumping bid war with the seller.

We will be onto the agent in the am. Like I’m happy to offer the asking price no quibbles, remove from market, subject to survey.
 
noproblem said:
Can you put up a picture of the place and directions to it? Wouldn't mind having a go at it myself. Ah no, but why is a house gone down in value so much in 5 years
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Not a chance it’s MINE maybe we’ll see .
It is pretty, & small & very oddly decorated, but must be freezing as it’s BER F
 
You could talk to the agent and see how open they are to an asking price bid subject to the property being taken off the market.

If they have set the asking price at around the level they expect to achieve, they may encourage the vendor to sell to you. Big win for the EA as they get their commission for very little work. I have seen some agents deliberately price properties up to 20% below what they expect in an attempt to generate a bidding war and achieve a higher price.
 
Thanks Leo, this will be my first time purchase. My OH purchased an apt years ago and I stayed pretty much out of it so am not really sure what the best approach would be. I really don’t want to get into a bidding war, but would like to see if a lower offer would be successful, especially as work is needed to bring it from a BER F to a BER C. We would have liked to avail of the deep retrofit grant but since the shambles of recent days, it’s probably not going to be possible.

I do enjoy a bit of a haggle though but this might not be the time for it.
 
em_cat said:
We would have liked to avail of the deep retrofit grant but since the shambles of recent days, it’s probably not going to be possible.
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That was never a runner, the application deadline for the pilot was back in July and there was never anything promised in terms of what would follow the pilot.
 
I think it's reasonable to talk to the estate agent and be very matter-of-fact. You're a cash buyer with specific needs / interests. This house meets them but you have no interest in being messed around or getting into a protracted process. What reasonable offer will close the deal quickly? If possible get them to say the first number if you can.

If they feel that you are serious but also there is the potential to lose you if it gets messy, the EA would likely advise that you are a high probability of deal closing and therefore worth more than a slightly higher bid. Given the energy rating and other quirks, the alternative they face is a much longer sales process.
 
Leo said:
That was never a runner, the application deadline for the pilot was back in July and there was never anything promised in terms of what would follow the pilot.
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I only found out about it when they announced they ran out of money as it doesn’t apply with our apartment.

However, it’s not a make or break point for me, the works would need to take place irrespective of the deep retrofit grant.
 
em_cat said:
However, it’s not a make or break point for me, the works would need to take place irrespective of the deep retrofit grant.
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Fair enough, there are other grants available, and very likely future deep retrofit schemes coming online if they ever get their act together and do more than just set ambitious targets.
 
I am assuming this place is in Dublin given price and size quoted. There is no set way for this to go it depends on a huge amount of variables

1. Sellers Situation, is an estate sale, does the seller currently live in the place.
2. How the price lines up against similar properties as other posters have put it has the agent priced it below market value etc
3. Just the luck of the draw of how many other people are interested in the property.

Having gone through this recently I don't think a cash buyer has any real advantage, i.e. if you only have 400k cash but another bidder has 420k in financing then they will get it. Having the cash available on a 7 day deposit isn't that much of a benefit because contracts still have to be drawn up and the searches, surveys done etc it just means that you transfer the money to the solicitor rather than them requesting from the bank. I expect most serious bidders are mortgage approved so the timing difference should be minimal in my case my mortgage was ready to be drawn down two weeks before the searches completed.

In my experience most agents were willing to let the property run and weren't open to taking it off the market even with offers made above asking in fact in cases my offers above asking were used to get other bidders up.

I think the best strategy is to research the fair value of the property, go to an open house, wait a few days and make an offer then wait to see what happens. If no further offers after a week I would enquire as to what the seller thinks of your offer and then start negotiating to get it taken off the market.

Don't go straight in with the asking.
 
Ah, well it wasn't to be, got a call from the agent to say the vendor has decide to stay in still in situ & has decided to go for a bidding war, so be it. I told the agent when they come to their senses, they can let me know. Thanks for everyones replies.
 
Leo said:
Bit harsh, did you expect them to do you a favour and not seek the best possible price for some reason?
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Well - without knowing the exact details - if you were selling a unique or unusual property that might only have a reduced potential market, in the context of a slightly softening property market and with potential economic shocks on the horizon, it probably is a little risky to not at least engage with an interested party and see if there is the potential to deal.

There's a judgement call obviously and it depends on whether there are other live bidders. But holding out in the hope of a bidding war may not be the best course of action
 
EmmDee said:
But holding out in the hope of a bidding war may not be the best course of action
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It might not be, and that's where a good agent will advise their client, but in more cases than not, holding out results in a higher price. The fact that it is an unusual property means interested parties might be prepared to go much higher. If it was typical, then people will drop out at a point and move on to the next similar property.
 
Remember that property prices may be coming down in places but there's an awful lot of places where property prices are increasing. Popular areas are still increasing and you can guess the rest of the story.
 
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