“CASH” offers -Do you have it?

Just because lending practices are getting tighter and tighter each month you can still get a loan.  You just have to answer a few more questions than before.  But have you ever considered writing an offer ALL CASH? 

This is a common practice for folks with competing offers or the purchaser just wants to put themselves in a better position with the Seller and not have a financing contingency. Then after the contract is accepted by both parties the purchaser switches to a loan.  Does this smell fishy to you, well if it does you better watch out?

Per most real estate contracts the Financing section sets forth the conditions for the Purchaser to meet if getting a loan.  Most contracts are standard language that state; written application for such loan be done in a certain time frame by the Purchaser.  However,

“If this Agreement is not conditioned upon Purchaser obtaining financing, Purchaser shall provide Seller with written verification from a third-party in possession of Purchaser’s assets within ___ days after full execution of this Agreement that Purchaser has sufficient assets to pay the balance of the Purchase Price at closing.” 

Simply put.  YOU BETTER HAVE THE CASH in the Bank or your pocket or else you are misrepresenting yourself.  And if your agent is telling you to do this then they are misrepresenting you and are in Ethics violations under the NAR Code of Ethics as well. 

If you write ALL CASH and you have the money in hand (or some sort of liquid form) and you decide later to get a loan on the home, that is fine.  The contract is NOT contingent on the financing, but if something comes up with the lender or the loan and you are denied – Well the house is still yours to buy.  Or at least contractually you are.  

So before you put ALL CASH down on the contract makes sure you know your cash in the bank and the change jar on the counter.

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