The seller, who accepts the “all cash” offer, wants secure payment


Q: I am planning to accept a cash offer to sell my home. Is a certified bank check really the safest form of payment other than a pocket full of cash?

A: We giggled at the thought of someone walking into a closure with a bag full of cash. Maybe they are paying for their multi-million dollar property in singles?

Seriously, you asked an interesting question and our answer might surprise you. Let’s start with an explanation of what constitutes an “all cash” offer.

Sellers want to know that when they sign a contract with a buyer, the buyer is finalizing the purchase of the home. Buyers use the phrase “offer all for cash” to indicate that they do not need to borrow money from a lender to complete the purchase. (It doesn’t mean the buyer comes with a bag of cash or even a certified check.)

Most borrowers go to a bank, mortgage lender, or mortgage broker, apply for a loan to cover part of the purchase price, and then pay the remainder (minus the escrow deposit) by wire transfer. Typically, the lender provides most of the funds for the home purchase.

However, because most buyers use credit financing, most sales contracts include financing contingency. This contingency states that if the buyer does not receive funding to buy the home by a certain date, the buyer can cancel the deal and the seller will refund the money deposited by the buyer.

Well, right now we’re in one of the hippest markets we’ve seen in over 25 years. There are many more buyers than there are properties for sale. Most homes are sold in bidding wars, and buyers go out of their way to make their offers stand out in a sea of ​​offers. So you are telling the sellers that they will buy in an “all cash” transaction. This means the buyer is willing to withdraw from the deal, including any cash that has been put on deposit for credit, if the deal fails for any reason, such as no funding.

In some real estate markets, brokers will require the buyer to provide evidence of the funds they can close with the buyers’ cash in the bank when purchasing. These agents try to make sure that the buyers actually close the house and have the money to do it.

But you have to keep in mind that most buyers don’t have that much cash to close without a lender. In the end, it depends on how much money the buyer puts down as a token of goodwill. If the buyer makes a cash-only offer but only deposits $ 1,000 in cash, the buyer doesn’t risk much – and the seller knows it.

But if the buyer deposits $ 25,000 or $ 100,000, the seller knows the buyer is serious and is more likely to close. The strongest offer a buyer can make is a cash-only offer with a substantial down payment.

Let’s get back to the mythical wallet. Typically, buyers close with a cashier’s check or they have already deposited funds to the clearing house or office. Whether they have a cashier’s check or the cash has been prepaid, the Settlement Agent will take those funds and pay them out to the seller, attorney (if any) and anyone else who will need to be paid after the deal.

Aside from shoppers making cash offers, fraud is rife in the wire transfer world. You need to make sure that the transfer information is correct because as soon as the funds leave your account they end up in the recipient’s account. And if you click the wrong link or send the money to the wrong place, you could lose all of your money.

Do not set up a transfer without first checking your account information with the billing company. If you get an email purporting to be from the comparator or property company, give them a direct call to make sure you get the correct account number. It’s hard to say how scammers and malicious actors can send phishing emails to buyers who are within a few days of the transaction being completed, but it does happen more often. Beware of any email you receive purporting to give you remittance information for your transaction.

For our reader, do not plan on seeing this wallet close. Instead, schedule a transfer of the money and let the professionals on your team guide you accordingly. At the end of the day, you want the title and keys to your new home, not a conversation with the FBI.

Contact Ilyce Glink and Samuel J. Tamkin through their website

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