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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.
I frequently do appraisals on homes with a cash contract. Never had a problem getting into a house. Sometimes the mortgage comes through in time for closing, sometimes it turns into a refinance a few days or weeks later.
It is a common occurrence in certain subsets in my area.
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?
His/her response is fine. It's a BS move by you. And obviously if you have to liquidate, maybe a cash offer isn't best? I get trying to work the system but I can't stand people who are deceptive. If it's a cash offer, have the cash ready. Don't go to closing and say "on second thought, I think I'll finance, can I has a few days?" Next please.
His/her response is fine. It's a BS move by you. And obviously if you have to liquidate, maybe a cash offer isn't best? I get trying to work the system but I can't stand people who are deceptive. If it's a cash offer, have the cash ready. Don't go to closing and say "on second thought, I think I'll finance, can I has a few days?" Next please.
How is the OP being deceptive? He asked how it would be best to include it in the contact as well.
This is NOT a "creative financing" question and issue.
It is a contract and integrity issue. OP has the right idea to include contract language that will clarify intent and make a guarantee to close on time.
And, it should be easily resolved with clear language, perhaps an addendum.
AND, with huge nonrefundable money paid to seller at time of contract.
$700,000 contract price.
$100,000-$200,000 non-refundable money directly to the seller. First though, check on the mortgage balance, so the seller can invest that 100 grand in sleek cars, long cigars, fine liquor and fast "company," and still pay off any mortgage balance.
Additionally,
Seller to do no repairs after inspections.
Buyer will pay contract price in full, regardless of appraisal opinion.
Guaranteed to close on time. Will close with a cash purchase if the lender delays, even one day.
Seller may retain possession for a week, two weeks, a month post-closing, if that is desirable to them.
Any or all of that language to be included in an attorney-drafted addendum to any standard contract you are using.
And, don't fully expect to win the day in multiple offer situations. Simple is often better than complex in competitive situations.
I don’t see how a contract that is more complicated than usual, with special financing contingencies will make your offer more attractive. A straight cash offer will still beat your offer.
If there is no language in the contract to make explicit your intent to try and get a mortgage at the last minute and change the financing, then I think you just increase your risk of losing your deposit.
I guess the one question for OP is, how fast can you liquidate the investments? If the loan seems fine but then the day before closing there’s a delay, would you be able to get the cash in time to close?
I guess the one question for OP is, how fast can you liquidate the investments? If the loan seems fine but then the day before closing there’s a delay, would you be able to get the cash in time to close?
Yup.
Of course, that should be easily confirmed, but certainly prior to contract and setting a closing date.
I just sold a house that got 15 offers on in 48 hours. I will tell you the one I picked was 52K over asking, cash offer, close in three weeks. If you want the house, go bold.
I sold my last place to a cash buyer. No appraisal, and he waived a professional inspection as well, and of course waived any financing contingency. We closed in 2 weeks from the signed contract. It would be impossible to do that if you tried to substitute in a mortgage instead of the cash. Of course in my case, he actually had the cash on hand, not in investments, as he provided proof of funds with the offer, which a cash buyer is expected to do. So all in all, it's unlikely you would get through an offer that you were claiming was cash when in reality, it wasn't.
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.
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 think the issue is you have the money now, but it is not cash in hand, and unless you have a lot more in equities than your bid, who is to say that the stock market doesn’t take a 5-10% correction the day you close? Will you have the money then?
__________________ Solly says — Be nice!
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Solly says — Be nice!
