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Old Yesterday, 09:06 AM
 
Location: North Idaho
26,812 posts, read 35,972,530 times
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I suppose you could write the offer up as a mortgage but with enough cash as a back up to pay all cash if the mortgage process fails.


I wouldn't find that very attractive, as a seller, but you could give it a try.


May I suggest that you pay all cash, get a mortgage after you buy the house, and use the money from the mortgage to re-acquire your investments. The bank doesn't care what you use the money for as long as you have the house free and clear as security for the mortgage and you don't lie about what you will use the money for.


Buying a house with a mortgage takes additional steps, additional appraisals, perhaps some additional repairs required by the bank, and it all takes a lot more time and has a lot more uncertainty. You offer all cash so the seller doesn't have to go through all of that and then, once you are in escrow, you expect the seller to go through all of that.
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Old Yesterday, 10:12 AM
 
6,161 posts, read 8,736,726 times
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Quote:
Originally Posted by Chas863 View Post
The last house I sold (last year) was to a couple on a CASH deal. They told me going into it that they hoped to sell their house quickly, but that it wasn't on the market yet. They also said that they could close anyway even if their house didn't sell quickly by liquidating some liquid assets.

I told them that was fine with me since I required 10% in CASH as earnest money and if they didn't close on time they would forfeit their earnest money... and had specific enforceable language to this effect in the contract. When they said "OK" and wrote a check for the 10%, I felt pretty comfortable and assured that the deal would close. If it didn't, I would have their 10% earnest money to keep and still have ownership of my house. The deal closed on time.
So you had in the contract that if it didn’t close on time the deal would’ve been cancelled?
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Old Yesterday, 10:44 AM
 
Location: Log "cabin" west of Bangor
6,607 posts, read 7,679,761 times
Reputation: 13581
Here's an idea I haven't seen floated yet- take a loan against the assets in the investment account(s) so that you have the cash on hand, and then do the mortgage. If the mortgage comes through on time, simply repay the loan on the investments in full.


I have money tied up in a retirement account, I wanted some cash for a certain project but I didn't want to take a distribution from the retirement account due to the tax penalties. So, I arranged a loan against the account at a 5% interest rate (paid to myself).
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Old Yesterday, 11:13 AM
 
12,976 posts, read 4,021,519 times
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We were in a similar position. We wrote a contract with a financing contingency. The seller asked us to remove it. I made sure I could get the loan before I did. If you have no concerns that you will be approved, you don't have to put it in. But you probably shouldn't do the brokerage statement thing. We asked our brokerage about a portfolio loan but they warned us if there is a big shakeup in the market, they could sell stock to cover it. We couldn't because a big part of our investment is in something in which we are subject to frequent blackouts for selling stock.
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Old Yesterday, 11:16 AM
 
12,976 posts, read 4,021,519 times
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Quote:
Originally Posted by nyc2pit View Post
Yeah, there are far more financially creative people than me so I assume this (simple) idea has been pursued before. And I totally agree, and I wouldn't expect that excuse to hold up.

My "back up" plan here would just be to pay cash, and then do a cash-out refi after the fact. Not ideal, but not the end of the world.

This is all theoretical by the way, to those assaulting my characters and threatening to fire me as a client lol. We made an offer with a mortgage contingency, I'm just thinking about how to make my offer better the next time.

Chas - thanks for your time and thoughts. Any resources you can suggest for me to learn more about my options?
If you can sell investments anyway, why not just take out the financing contingency and sell only if you need to? You have to disclose that you are getting a loan but if the mortgage contingency is out, you have to close.
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Old Yesterday, 11:18 AM
 
12,976 posts, read 4,021,519 times
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Quote:
Originally Posted by 2bindenver View Post
Realtor here. How are you going to get an appraiser into the house? What happens if there is a delay in underwriting?

There are companies that will buy the house of your choice for cash and sell it back to you a week later.
My contract had a 10 day extension for a delay in underwriting. A reputable company will make your close date work.
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Old Yesterday, 11:20 AM
 
12,976 posts, read 4,021,519 times
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Quote:
Originally Posted by Spottednikes View Post
Just write it up as a financed deal, not contingent of approval, waive the appraisal *agreeing to pay any difference between appraised value and selling price (or if you are putting 20% dn on conventional financing, and it isn't a jumbo loan, and you have good credit, then you can get a freddie mac appraisal waiver before even turning in an executed contract. If you do that, then decent lenders can close in 2 weeks.)
No need to be deceptive.
Right. And if they downpayment is big enough, the appraisal isn't an issue anyway.
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Old Yesterday, 11:23 AM
 
1,782 posts, read 844,258 times
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Quote:
Originally Posted by GoPhils View Post
So you had in the contract that if it didn’t close on time the deal would’ve been cancelled?
Words to that effect, and with the earnest money forfeited to the seller as liquidated damages.
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Old Yesterday, 11:28 AM
 
Location: Sandy Eggo's North County
3,558 posts, read 1,320,581 times
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Quote:
Originally Posted by nyc2pit View Post
Hi all,

Lost out on a home recently and looking for a way to improve the attractiveness of an offer.

We are fortunate enough to be in a position where we could make a "cash" offer at the price range we are looking at. However, to do this would require liquidating investments that I I would prefer to keep in the market.

Is is possible to make a "cash" offer on a home, showing a brokerage statement, for example, as proof of funds and - at the same time - apply for a mortgage on the property?

Basically, my thought is I could "show" that I can pay for a home in cash, but if my mortgage is approved/ready, etc. by the time we close, then I'm going to go ahead and use that. Basically, I'll take on all the risk of getting financing, appropriate rates, appraisal, etc.

I did pose this to my relator who said this amounted to a "bait and switch" and advised me against it. I'm understand her point of view, but also not sure I agree - if I can guarantee the seller the funds - one way or another - why would they care where they ultimately come from?

Appreciate any thoughts.

Edit to add: Am aware of cash-out Refi, etc. What I have read seemed to say fees/rates are higher in this situation, but open to learning more...
There are ways to become the "primary buyer" but how something is paid for isn't a criteria.

Sorry, I only read the first response and saw the train leave the rails as it was pulling away from the station.

So, things like~

No inspection

No pest control report

No seller responsibility are what is most attractive to sellers.

Something like this may get you preferential treatment. Besides, money is cheap, right now. You'd be crazy to withdraw from a 7% appreciating asset, into a 3% liability. (Even though, your 7% asset is gonna be taxed at your States prevailing...)
Now, if you're one of "those" people that don't like owing money to anybody, then take the loan, and pay it off the first payment. That's what I'd do. (I know, call me crazy!)
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Old Yesterday, 12:33 PM
 
12 posts, read 2,963 times
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Quote:
Originally Posted by Zymer View Post
Here's an idea I haven't seen floated yet- take a loan against the assets in the investment account(s) so that you have the cash on hand, and then do the mortgage. If the mortgage comes through on time, simply repay the loan on the investments in full.


I have money tied up in a retirement account, I wanted some cash for a certain project but I didn't want to take a distribution from the retirement account due to the tax penalties. So, I arranged a loan against the account at a 5% interest rate (paid to myself).
Zymer - thanks - that's an idea I hadn't thought of. That might be an option going forward.

Appreciate all (well, most) of the comments that didn't call me names and contributed their $0.02.

The current house was very old (150+ years old) and the other buyer was willing to waive inspection. Call me crazy, but I was not willing to waive that. So I can't blame them for wanting to take a different offer. But I'm thinking about what else I could have done to make my offer more appealing. Going cash could work, but- as I said - not wanting to liquidate (currently) rapidly appreciating assets. I guess reasonable people can disagree about how much more "attractive" this would make an offer ..... but options are good, and I appreciate the thoughts.
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