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Chas - your thoughts and mine agree. Maybe I didn't elucidate it clearly enough, but what you're saying is how I was thinking about it.
I would have waived the mortgage contingency. If I couldn't get a mortgage for some reason, I would have proceeded to close with cash and then dealt with it on the back end. So the bait-and-switch thing is hard to understand...
Diana made the point about speed - in this specific situation it didn't make a difference, but it would make sense to me that in many situations, that would be the benefit of cash (fast close).
Certainly the deal "looks" more complex to a seller, and that's a negative but ... I can't be the first person in the world to have thought about this or had a desire to do something similar.
I can personally assure you that you are not the first to think of or to do something of this nature. I've bought numerous properties on "CASH deals" without having the amount of the purchase price sitting in a bank account just waiting to be spent at the moment the contract was signed. And I certainly wasn't the first or only to do that either. Just know what you're obligating yourself to do before doing it because the excuse "Sorry, but I couldn't come up with the money" just won't hold water in this situation.
I can personally assure you that you are not the first to think of or to do something of this nature. I've bought numerous properties on "CASH deals" without having the amount of the purchase price sitting in a bank account just waiting to be spent at the moment the contract was signed. And I certainly wasn't the first or only to do that either. Just know what you're obligating yourself to do before doing it because the excuse "Sorry, but I couldn't come up with the money" just won't hold water in this situation.
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?
LOL. Well that's just a BIT harsh, don't you think?
My morals are just fine. What does the seller care where the money comes from? If I can't arrange the mortgage, then I'd pay cash. I'm failing to see how cash from a mortgage bank would be any different than cash from my brokerage to the seller at close. If you want to explain that to me instead of making a ridiculous accusation about my character, I'd love to hear WHY it would make a difference.
I'm not asking the question to "justify" myself, I'm genuinely interested in understanding why this would make a difference if all the risk was on me. Hell, I'd be willing to put it in the contract stating exactly what I intended to do. Seller gets all the benefits and none of the risk.
So do you want to be a little less of a jerk and make a thoughtful response?
Usually cash offers move much more quickly than getting a mortgage. That has been my experience anyway. We've closed in as little as two weeks with cash. Hard to do that with a mortgage with everything that is required.
The point is your offer isn’t contingent upon you being able to get a loan. So I agree, what would they care? A qualified realtor should be able to tell you how to properly word the offer.
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?
I'm sure that there are numerous books on real estate investing and especially "creative financing" available for sale. Most of the ones I bought and read were written 40 years ago, but the same ideas and principles are still valid today. A person just needs to think "outside the box" and read a few books on ways of achieving your goals. When you're able to buy a property without any money out of pocket and get money back at the closing, then you have "arrived".
The point is your offer isn’t contingent upon you being able to get a loan. So I agree, what would they care? A qualified realtor should be able to tell you how to properly word the offer.
Don't count on many realtors meeting that "qualified" part when it comes to creative financing or creative contract language. Do your own research and you tell the realtor what language YOU want in the contract. You'll get some funny looks from them and some will tell you that you can't do that, but they start to think differently when they get the commission check from the sale that they said couldn't be done.
Don't count on many realtors meeting that "qualified" part when it comes to creative financing or creative contract language. Do your own research and you tell the realtor what language YOU want in the contract. You'll get some funny looks from them and some will tell you that you can't do that, but they start to think differently when they get the commission check from the sale that they said couldn't be done.
Delayed financing allows buyers to use cash, and in some cases stocks, to buy a house and obtain a mortgage after the home is purchased. Essentially, they’re enjoying the advantages of being a cash buyer while still getting the benefits of using a mortgage for leverage.
Delayed financing deals are very similar to buying a home and doing a cash-out refinance, so you can expect to pay rates similar to the prevailing rates for cash-out refis.<<
I see no issue here. Then again, I am not a realtor nor an attorney.
But to hell with the realtor... I dont care what they say. Many times realtors lie, exaggerate, withhold information... many are on the complete up and up, but many are not.
It's what the lawyer says that matters. Talk to your atty, and see what they say. If the contract stipulates you are paying cash, but also stipulates that another form of legit pymt can be made at closing, I see no issue. Other than the close date may get pushed back, which the seller may not want to do, which is understandable from their POV. If I am selling a house, I dont care where the money comes from, as long as it winds up in my bank acct the day after the close. If the buyer says cash, with a stipulation that he may pay via mortgage at close, and I agree to that, and the buyer fails to come through as per the contract - guess what? He loses his deposit.
And don't worry op - I see nothing wrong with your morals here... and I dont thing the majority of the rest of do either.
Appreciate the time you all took in your replies. It's nice to know I'm not totally off-base here.
The speed of closure is obviously one drawback - obviously can't get a mortgage together in 2 weeks so if that's the goal, then this wouldn't be a great option.
Joy - I did read about that delayed financing. I don't understand what the difference between that and a cash-out refi would be, exactly. But something more to look into.
Just trying to think a little creatively in a market where I don't want the answer to be "just make a higher offer." It was all I could do to hold my nose and make the offer at FULL asking .... ugh ....
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.
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