– Sean and Darren here with another “Bite Size” for you from Marbella & the Costa del Sol in Spain. 

Darren Simons – Bill and Wendy. They’re from Stratford, but lovely to see you as well. Thank you very much for your question. We’re asking a lot of people to come in with questions and this one is quite an interesting one. It’s what is a cash buyer and really what does the term mean? We hear this a lot here in Marbella, don’t we?

Sean Woolley – We do, and a lot of our clients looking to buy property in Marbella and the Costa del Sol actually say to us, “Oh, I’m a cash buyer. I’m ready to buy.” And what they should mean is that they’re ready. They’ve got the 100% of the funds for the purchase ready and available to them in cash. So they can just go to their bank, write a check, get the money drawn across and it’s done. A cash buyer is not someone who needs a mortgage. It’s not someone who has money tied up in investments that they can’t get hold of. It’s not someone who has a house to sell. No. So a genuine cash buyer is someone who can do the deal now with the money they have available to them. And we’ve noticed a lot of clients recently have been calling themselves cash buyers, but when you actually delve into it, they’re not. And I think, you just need to be honest with your agent about this because if you’re not a cash buyer and you need to do some financial re-engineering or you need a mortgage, let us know because then we can then get the best deal possible for you with the best payment terms, knowing your circumstances inside out.

Darren Simons – Give us a couple of pitfalls that cash buyer, when it doesn’t go completely right then, so what can happen?

Sean Woolley – So if you’re in the market and you say, “I’m a cash buyer, I can do this,” then what you’re doing is you’re bigging yourself up a little bit by saying, “I’m ready to do this deal.” And what you would probably do, or what I would do if I were a cash buyer is I would try and get myself the best deal possible by saying to the vendor, “Look, I’m ready to do this, are you? Then you make an offer that’s maybe a little bit cheeky and you try and get the Marbella property for the best possible price. But then, of course, if you then turn around to your agent or your lawyer and say, “Actually, I can only put down 10% or I can only put down 6,000 euros, ihe rest of it’s coming from a house sale in the UK.” “Oh, when’s that going to be?” “Well, I don’t know, I haven’t sold it yet.” And then we start to having to backtrack with the vendor, pulling the deal a little bit. And then the vendor more often than not says, “Hang on, you told me this guy was a cash buyer. The buyer said he was a cash buyer. I don’t believe you anymore.” And then the deal’s gone. So it’s really important to be honest. We have a lot of people who come over and look at properties and they have a house to sell, be it in the UK or in the States. And that’s fine, that’s absolutely fine, but tell us so that if you’re in a position to make an offer and you want something, then we can factor in the timescales for that so that you don’t lose your money, you’re not getting involved in a contract where you know you’re not going to be able to get out of it and you still haven’t sold your place back home.

Darren Simons – – Yeah, and also, I feel that you’ve got a cash buyer, you’ve got X amount, but it’s also important for the cash buyer to know that that might be the purchase price of the property, but then you’ve got the added fees as well. So it’s important to not misunderstand what funds you’ve got and what could be extra as well.

Sean Woolley –– Absolutely, it’s kind of that old debate about how much are you worth? What do you count in that? Normally, you count cash in the bank and equity in your properties, and any money that is liquid or that you can get your hands on quite easily. And the cash buyer thing, again, has become a bit of an elastic phrase and people think of themselves as cash buyers when actually, they’re not. And there’s nothing wrong with not being a cash buyer. There’s not many people, or not a huge proportion of buyers who can just go and grab a million euros in cash. A lot of people would actually prefer to finance part of that amount or they would rather liquidate some other assets to be able to afford it. So there’s no shame in not being a cash buyer. Not many people are. Just be honest with us because otherwise we’re in danger of brokering a deal that isn’t doable. And then you lose… People think, “Oh, is this guy serious? Can they do the deal?” And then you lose credibility. That’s the word. It’s always better being upfront and as honest as you can be for us to get the best deal for you that’s possible.

Darren Simons – Yeah. Great advice. Bill and Wendy from Stratford, hope that helps. Keep those questions coming in. Until the next time, see you soon.