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Property Vir…, Other/Just Looking in Greensburg, PA

Why would a seller refuse to accept a mortgage -- only wants cash offers?

Asked by Property Virgin, Greensburg, PA Mon Nov 29, 2010

I found a house I want to buy, it is being sold "as is" (it is a foreclosure). I know that means that no matter what is wrong with it, the seller won't fix it. It is"corporate" owned. The seller only wants cash. I don't have cash and I cannot borrow that much cash from family. I am qualify for the amount of money they are asking for the house; I would even qualify for a 203(k) rehab mortgage if the house needed major work (though my real estate agent, my husband who used to work with a mason, and my father an experienced home buyer) do not see any MAJOR problems with the house. Why would a seller refuse to accept a mortgage?

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Answers

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It is very likely that the seller has encountered issues with deals falling through due to mortgage issues in the past. To compete, you could consider removing your mortgage contingency, but I wouldn't advise it.

Sounds to me as though your best course of action is the submit a written offer accompanied by a strong preapproval from a credible lender - even better get approved, provide a commitment, and submit it with a request for receipt to ensure that it the seller sees it. The seller can ask for anything but it doesn't mean he'll get it. So in the end you may still prevail.

Get that offer in there, and then keep moving and keep looking. Things tend to work out....

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
1 vote Thank Flag Link Tue Nov 30, 2010
There Can Be Many Reasons Why The Seller Only Wants to accept cash offers. For one the seller might be asking more than the home originally would appraise for. The sellers are not looking to make any needed repairs to obtain a mortgage such as peeling paint, water in basement and or a bad room. Another reason is most banks take any where between 30 and 60 days if not longer to close on a home when its being financed as there is many conditions that need to be met. I have seen some Cash Offers Close in 7 to 10 days. If its bank owned or a foreclosure they may want to rid of the property prior to the end the year also in which is why they want cash only as its the fasted way around.
1 vote Thank Flag Link Mon Nov 29, 2010
As you can see there are many reasons. My advice is to ask the seller or have your realtor do it. A mortgage comes with built in safe guards to protect the buyer and the mortgage company, just like a contract approved by most real estate borads. Simple one page contracts for cash can leave a buyer with a serious defect after the sale. Cash or mortgage make sure you are protected.
0 votes Thank Flag Link Tue Nov 30, 2010
It depends on what is wrong with the house, if it needs major repairs, most mortgage company will not give you a mortgage.
0 votes Thank Flag Link Mon Nov 29, 2010
There are numerous reasons a Seller will only accept cash. .
1. The price is so low that the Seller believes a cash offer will come quickly. Negating the to wait for further bank approval.
2. Seller believes that there is a defect in the home that will stop it from financing properly. Could be lack of.. or proper service of various utilities, to structural issues.
3. Home won't appraise. Could be various reasons.
.... the list really could continue.

I would recommend that your agent speak with the listing agent. A quick call may give you the answer your looking for.
Let me know if you need any more help.

Thanks
0 votes Thank Flag Link Mon Nov 29, 2010
Without all of the particulars of the situation this is a tricky question!
Hmm... For the bank it seems like timing might be an issue. Even though it seems you are willing to come up with an acceptable mortgage that would equip you to handle even major repairs, the bank might be interested in closing within a timeframe only a cash buyer would be able to offer.

I can't really imagine why you wouldn’t be able to at least submit an offer though.

Good luck!
0 votes Thank Flag Link Mon Nov 29, 2010
The seller may be afraid of the property appraising for the purchase price. If this does not happen then you will not be approved for a mortgage. It really does not sound right. Ask your realtor to find out why they will only accept cash.
0 votes Thank Flag Link Mon Nov 29, 2010
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