Re: please explain - Posted by Matt (MPD) IL
Posted by Matt (MPD) IL on September 10, 2004 at 04:12:51:
Writing an all cash offer is simply saying that there aren’t any finance contingencies. When you get to the closing on a cash deal, typically you’re bringing in either a certified or bank check… never, ever, ever have I seen someone actually carry a silver suitcase filled with dead presidents into a closing. In fact, I’ve heard from some closing agents that it’s completely frowned upon what with counterfitting, money laundering etc., to bring a large amount of cash to a closing. Any large sums of money get reported to the feds in those events to be sure there isn’t a situation such as I mentioned.
As you asked about closing time… yes, the amount of time it’ll take you to close is generally going to make the difference. I work with a couple lenders and have access to commercial lines of credit (i.e., warehouse lines of credit) which require only a signature on my part to receive the funds, no appraisals, no documentation, nothing. In the case in which I purchase a property I can literally close on it in as little as 3-5 days, depending on how fast the title company can get me a commitment. (I closed one house without a title policy and I’ll never do it again.)
In some cases our competition has access to approved lending which may still require an appraisal and lender approval which can take 2-3 weeks or more. From a pure timeframe standpoint (all other points being equal) our offer is better simply because there is no outside approval and we can absolutely close when we say we will.
The discount the seller is offering is for a quick close from someone who already either has the funds, can access the funds in such a way that it takes only the amount of time to actually receive the check or has a lender that does not need a final say in the process.
As someone else in this thread had mentioned (in quite a few less words than I) the seller is looking for someone who provides and iron-clad sale.
Writing an offer for all cash and getting a loan, by the way, can also be done as long as you don’t try and use lender approval to squirm out of the deal. In other words, if you write all cash and go to a bank and they say no, the seller can sue you for breach of contract. If you write the same offer and the lender says yes, as long as you can close it in the amount of time specified in the contract, it makes no difference to the seller who has made the check out to him/her. Either way, at closing they will walk out with a check that they can deposit directly into their account and at most wait 3 days for it to clear. (In my neck of the woods certified, cashier’s, and bank checks are all held for 72 hours for verification from the issuing bank.)
Hope that clears up any confusion on wording on the contract.