The underwriter of a mortgage wants to make sure that the property they are underwriting a mortgage for is worth it. If the building isn't finished, the association is not stable, there is litigation between the builder and developer and the City because of bankruptcy, etc., these could all be reasons why there is no chance of delivering clear title and why it's considered unstable. And, those are reasons why a seller would say "cash only". They pretty much know that financing is going to be a problem through a conventional lender. If you can find a private mortgage holder who is willing to put up the money in the face of all of the problems, you could try that.

If you're going to try the cash route, make sure you aren't leaving yourself with no reserves to pay for the place.

By the way, the problems I describe are actually going on in some condo developments that have units for sale right now!!

I know of a couple of condo projects in the Twin Cities that have construction liens against the property, so lenders aren't willing to lend on the properties because they can't be guaranteed clear title. If you go the cash route, make sure you get clear title to the property.

Peter,

I would recommend that you have your agent call the listing agent and ask why they won't accept financing. Sometimes there is a reason and other times the listing agent isn't sure if it will qualify so they just exclude financing up front. At the very least it is worth a shot.

Good Luck!

Cameron Piper

Hi Peter,

Basically they're saying that you won't be able to get a loan on the property so you would need to pay by some other means. Personal line of credit, home equity, a check from your savings, etc will do. Like Don mentioned below, there's some issue as to why it's a cash only deal. It's important that you find out why and see if it's a deal breaker before buying the place. Be sure to work with an agent that's familiar with this type of transaction (not all are).

Good luck!

Peter,

Usually the financial terms will state cash only if there might be a problem getting a lender to fund a loan on the property. In condos, this can be due to the current state of the property, possibly a lawsuit going on with the association or developer, or any other myriad of issues. If it is in good condition, I would usually tell a buyer to do some more research on the background of the property in question.

To answer your question, I've rarely seen a seller turn down an offer as long as it can be funded in a proven manner....so I think the options you have laid out above would all work. But again, I would be a little wary.

Let me know if this answered your question or not and if we can provide any more assistance.