Cash sales are a familiar part of the landscape when it comes to second-hand goods. But houses?
It caught The Block’s eye recently when a number of properties were advertised for sale with the proviso “cash buyers only”. We know cash buyers have had an edge in the market for the past few years but excluding those with a mortgage entirely seems a new departure.
Keith Lowe, managing director of DNG, one of the agents with at least one property listed for sale to cash buyers only says there's usually a valid reason for those borrowing to be excluded from a sale.
“There could be an issue with a property. For instance it might be in such poor condition that a bank may not be willing to lend for it or maybe the management company has gone bankrupt. If there was an issue though it would be disclosed.
“There also could be a fixed-term tenancy in place which would make a property only really suitable to an investor. There are sometimes issues which make it impossible for an interested party to get a loan. It happens the odd time but it’s not common and any issue we know of as agents we would disclose,” Lowe says.
Chairman of the Society of Chartered Surveyors Ireland’s (SCSI) residential section John O’Sullivan doesn’t envisage the practice becoming common. “Is it a trend? No. There are instances where a property might only be suitable to a cash buyer but, in my experience, lending has now outstripped the number of cash buyers and investors out there.
“You’d be taking away a large slice of the market if you only sold to cash buyers so there would have to be a defined reason for that.
“It’s likely only to be in isolated cases and it must be remembered that agents only act upon the instructions of the vendors of the property.”