Month: May 2015

When selling a home, the ability of the buyer to obtain a mortgage is a factor many sellers must consider. Once you accept an offer and your property goes ‘under contract,’ you miss out on additional interested parties. If the buyer’s loan falls through for any reason—perhaps because the appraiser undervalues the home—it’s all too common to find yourself right back where you started, and you may have lost weeks or months in the process.

An all cash buyer removes the risk of such hassles. With no mortgage involved, less can go wrong—financially at least—before closing. However, there may be hidden catches.

Greater Demands

Many all cash buyers are investors looking to make a profit flipping the property or converting it to a rental. Because cash transactions close quickly—in as little as 10 to 14 days compared to the 30 to 45 required for most mortgage purchases—the buyer may want you out equally fast. If you’ve already moved into your new home, this won’t be a problem. However, if you were waiting for one property to sell before closing on another, the buyer may force you into interim accommodations.

Some cash buyers are also particularly demanding when it comes to items included in the sale. While it’s customary to leave behind ‘fixtures,’ loosely defined as anything that is fastened to the home (such as a chandelier) or an integral part of the design (like built in bookcases or the fireplace mantelpiece), an all cash buyer may decide he or she wants some of your personal belongings (like an antique mirror on the wall or statue in the garden) as well. Refuse to comply and you could lose the sale.

Antagonistic Behaviors

Whether you’re dealing with a buyer who is paying cash or using borrowed funds, you can expect some negotiation. Offers under asking price are not unusual, and you should not take them personally in most cases. However, some all cash buyers believe they have the upper hand and project an attitude of superiority because of it. They make an offer that is substantially less than the market value based on recent comparable sales and then rely on bullying tactics rather than negotiation.

These antagonistic behaviors may include insults about your property and the way you’ve maintained or decorated your home as well as repeated harassment if you request time to think about the offer. Some will do anything to make you feel as though you won’t be able to find anyone else willing to purchase it. Fortunately, if you’re working with a real estate agent, he or she may be able to mitigate these unsavory tactics.

Scams

All cash transactions that turn out to be scams are not unheard of. In most cases, they involve a personal or business check written for purchase of the home followed by a subsequent ‘change of heart’ and request for a refund. If the homeowner or real estate agent refunds the purchase funds before discovering the original check failed to clear the bank, they lose hundreds of thousands of dollars.

If you’re entertaining the idea of accepting an all cash offer, be wary of buyers who don’t personally view your home. You should also exercise caution if a buyer contacts your real estate agent by email and never conducts business in person, or agrees to your asking price without negotiation.

One of the most exciting times in a person’s life is when he or she purchases a home. While it is a very exciting time, it can also be a very stressful process. The experience is different for each person, and there are always emotional highs and lows involved in the process of purchasing a home. For example, a buyer may be ready to celebrate when the seller accepts an offer. However, the next weeks could bring great disappointment if an inspection shows some serious problems. Some sellers may be difficult to deal with. However, motivated sellers are often agreeable and friendly. There may also be problems with the title clearing, or a lien may be placed on the property. These are all issues that can cause a great deal of stress for buyers. When facing this process, it is helpful to divide it into three increments.

1. Start by reading a sample purchase agreement.

For many buyers, stress can start when they are completing a purchase agreement. If an agent does not offer a copy of such a document, it is helpful to request one. Read it carefully to better understand all of the terms. A good agent will also explain to buyers that purchase agreements with the blanks filled in will look different than the closing documents featuring empty lines. This is not a reason to panic. The agent will be able to help with reviewing the offer before it is submitted. Some of the most important points to read and understand include the following:

– Earnest Money Deposit
– Purchase Price
– Down Payment
– Closing Date
– Loan Terms
– Loan Amount
– Closing Cost Allocation
– Agency Relationship Disclosure
– Acceptance & Delivery Terms
– Contingencies

2. Be patient when waiting for acceptance.

Waiting for offer acceptance is one of the most stressful steps in the process of buying a home. In some cases, an offer may be accepted immediately. However, it may take several days in other cases. The quickness of acceptance often depends on the type of sale and how motivated the seller is. To combat this stress, it is helpful to call people who have bought their own homes. If this is not possible, discuss concerns with an agent. It is best to avoid putting too much focus on the unknown. Try picking up a new hobby or resuming an old one while waiting. Keeping the mind occupied is a good way to pass the time and reduce stress. If the offer is accepted, it is time to breathe a sigh of relief and brace for the next stressful point in the process.

3. Stay occupied while waiting to close.

Waiting for an approaching closing is stressful to all buyers. During this time, the lender may need more information or problems may arise. It is helpful to stay on top of what is happening. However, it is also helpful to avoid stress by keeping busy. A good agent will be able to predict problems and address them beforehand, which results in an efficient process and a quicker closing time. Keep in mind that agents want to get paid, so they will take on many burdens included in the process. If concerns arise, discuss them with the agent. Once the closing date has passed, the only stress will be the moving process.