Home Buying in 55331>Question Details

Bea Arthur, Both Buyer and Seller in Minneapolis, KS

Cash Terms... means we can't finance?

Asked by Bea Arthur, Minneapolis, KS Thu Feb 25, 2010

Almost completed a renovation of our house and looking to buy another. We found a house currently lender owned and have cash for a down payment. If the listing states "cash" under Terms, does that mean they wouldn't accept a cash down payment with financing? Once we sell our house (this summer) we would surely be able to pay off the new house with our equity.

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6
Rehab financing also is an option if you find out the home needs work in order to qualify for "normal" financing. Rehab financing requires you to get an estimate for a contractor to do the work that needs to be done and to qualify for rehab (i.e., FHA 203K) financing up-front -- the total cost of the loan (purchase price plus repair costs).
These types of properties are one of the last remaining jewels in the foreclosure market as many people incorrectly shy away from them when they shouldn't. There's very potential equity in many of these homes.
Steve
0 votes Thank Flag Link Thu Feb 25, 2010
As a long time REO (bank owned homes) listing for the Twin Cities, this is commonly done when the bank owner feels the property will not qualify for regular financing. For example, we had a relatively inexpensive newer home in an upscale neighborhood that had been damaged by water leakage from pipes that froze and burst. The condition of the house disallowed normal financing and so the bank put it on for "cash".

But in doing some basic research I found several programs that allowed for repairs and fix-up to be done after closing and be included in the mortgage. My buyer clients were able to put together a much better offer than those offering cash (such buyers tend to low ball). It was really a matter of presenting the offer in a way that set aside the bank's misconception that cash was the only way to go.

We now have several excellent lenders who specialize in financing such properties. We even have contractors who can estimate needed repair costs. I would be happy to share those with you. Feel free to call or email.

Steele V. Propp
Bank Foreclosure Specialist
612-325-6764
steelep@aol.com

Best wishes,
0 votes Thank Flag Link Thu Feb 25, 2010
Most likely the bank would not consider anything other than cash because they have determined that financing most likely would not go through due to condition.
Web Reference: http://www.lennyfrolov.com
0 votes Thank Flag Link Thu Feb 25, 2010
Bea, if you have an agent your working with, have them call the listing agent on the bank owned property, and ask them why it is cash only. There may be a way to buy with a mortgage.
0 votes Thank Flag Link Thu Feb 25, 2010
Bea,

Homes are often listed as "cash buyers only" because the seller knows lenders will not offer financing on the subject property.

This is normally the case when the property in not in livable conditions, in great disrepair, requiring considerable renovations.

It sounds as if this is the type of home you are seeking......but they often come with a liability...cash only buyers. This does not mean you couldn't use some creative means of coming up with the money to pay cash!

Good luck with your purchase,

Bill
0 votes Thank Flag Link Thu Feb 25, 2010
That depends. Most likely you would be able to submit an offer with financing unless there was a known issue with the property that would prevent financing; such as a condo development with too many investors or the condition of the home that would prevent a lender from financing the purchase. Otherwise, although the seller would like a cash offer, financing may be acceptable. Remember, other than the contingency for the financing, the seller will get all of their money at the closing table.

David Lang
Keller Willams Realty
239-677-8780

http://www.SWFloridaHomeSearch.com
0 votes Thank Flag Link Thu Feb 25, 2010
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