In an ideal world, your property commands an impressive price. But is the highest bidder always the best?
It’s natural to want the best possible price when your property goes to market. The question is whether this is the most important aspect of a sale.
The more important consideration maybe to find the best possible buyer at the best possible price.
It’s not unheard of for a property to be snapped up quickly, at a price both seller and buyer are happy with, only to stall at a later date – the buyer suddenly turns uncommunicative; there’s not been the instruction for a surveyor to carry out a valuation on behalf of the bank; your agent can’t get hold of the buyer. These are the warning signs that there’s trouble on the horizon.
One in four property sales fall through, so the importance of choosing the right buyer can’t be underestimated.
Mortgage rates are low, enticing first-time buyers to get a foot on the ladder, but they can trigger red-tape migraines for both the buyer and the seller. Does this mean that the cash buyer is king? Well, yes and no.
For a property owner ready to sell, an all-cash buyer can be a dream, far away from the strictures of bank loans, the whims of appraisers and any kind of chain.
The latest data for the UK market is showing an increase in the proportion of buyers using cash – almost a third of all purchases in the first half of 2013, with a few notable hot-spots, such as the south-west.
So a key consideration is that price isn’t everything.
Position is also important – how quickly can the buyer move and how keen are they to push the sale through, leaving you secure in your sale?
A cash buyer is in a promising position to move quickly forward in a relatively hassle-free sale.
This doesn’t mean a buyer with a mortgage will always come in second place.
The truth is that someone buying a home with credit may still compete against a cash buyer. If a buyer with a mortgage has a significant down payment, secure employment and good credit, their offer may be just as secure.
Ask your buyer the hard questions to determine their true value. A buyer with a loan may be able to provide a pre-approval letter from their lender, making their offer equally viable.
The trick is not to get caught up with price, as long as competing offers are comparable.
Cash may be king, but the queen may be more reliable.
Andrew Marshall is a managing partner at Fine & Country of 36 High Street, Market Harborough.
For more information about the firm, see its website at www.fineandcountry.co.uk.