Karen, Home Buyer in Union City, NJ

What does it mean when a buyer accepts cash only? Is there any catch there?

Asked by Karen, Union City, NJ Wed Mar 17, 2010

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Answers

8
Yes there is a catch. It is a Red Flag!

It is one thing to prefer cash but quite another to only accept cash.

1. The building can not get financing
2. The seller priced the property too high and knows it won't appraise and knows a lender will not loan at the sale price.

As an all cash buyer, you will lose your deposit unless you have a financing contingency. It is in the seller's best interest. There are advantages to a buyer that can pay all cash but not when it is required unless it is being sold below market value.
2 votes Thank Flag Link Tue Dec 11, 2012
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
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Karen,

In answer to both your questions, some sellers prefer a cash deal because it's a quick closing.

In regards to pre-war buildings, it's a matter of preference. In some cases the rooms are larger, but it comes down to individual preference.

RE: Mice/Roaches ...that can happen anywhere! It has nothing to do with the age of a building.

Ross Ellis
Halstead Property, LLC
770 Lexington Avenue
New York, NY 10065
212-371-7828
1 vote Thank Flag Link Wed Mar 17, 2010
Hi Karen. Since you've gotten the answer below, I'll add a different wrinkle. The perhaps obvious plus here is that there is no monthly mortgage payment! One less expense is off the table and you'll just deal with the usual carry charges like maintenance (if coop) or common charges (if condo).

The caveat is don't go in alone. Get professional help from your local Realtor. They will advise and guide you on many aspects of purchasing prior to any offer. Good luck.
0 votes Thank Flag Link Sat Mar 20, 2010
It could be they need repairs and know that financing could be a problem. Maybe they tried to sell it before. Had a contract with financing and either the house would not appraise high enough to make a sale OR the financing did not work out and the deal fell apart. Not wanting to go through that again cash only was posted.
0 votes Thank Flag Link Wed Mar 17, 2010
Do you mean the seller will only accept cash offers--it could be a result of a few things and depending on the property--possible existing violations, needs to close quickly, loans not guaranteed to take place, etc.; your agent can best answer depending on the particular circumstances.
0 votes Thank Flag Link Wed Mar 17, 2010
I know you asked another question here, so let us know what type of property you are talking about? It could be that if you are talking about a co-op, it has been declined by Fannie Mae, so the seller already knows that you won't get financing. If that is the case, you might want to reconsider because it means that you will have a hard time selling it. I doubt a Hamilton Heights building would be an all-cash co-op, but those do exist.
If you would like me to check a specific building as far as financing goes, please feel free to contact me.
0 votes Thank Flag Link Wed Mar 17, 2010
Typically, a seller will accept cash only because the property has some issues that will keep it from qualifying for a loan. There are some re-hab loans that will work sometimes in these circumstances. One such loan is a 203-K loan.
Web Reference: http://www.SDHomePros.Com
0 votes Thank Flag Link Wed Mar 17, 2010
You mean a Seller, I think... The seller just wants to close a quick sale and there may be issues that a lender may not support. Get the sellers disclosures to see. You may find that the appraised value is not there and there are issues with the home which is why all cash is a way around some of these things. Start with the disclosures and go from there...
Raphael
0 votes Thank Flag Link Wed Mar 17, 2010
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