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Sarsgolfs, Other/Just Looking in Cambridge, MA

What should i watch out for from an cash deal buyer, no broker? The house may be worth $1mil. Thanks.

Asked by Sarsgolfs, Cambridge, MA Sat Nov 5, 2011

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My colleagues are all correct in their advice. It is actually fairly easy to verify the integrity of a cash buyer's actual ability to pay cash. Before you sign over title to the house, I would suggest that you hire an experienced real estate attorney, and stipulate that the buyer's purchase funds are wired into your attorney's IOLTA account 48 to 72 hours prior to closing. Your attorney wil then be able to verify with his/her escrow bank whether the funds have actually been credited. It is a good idea for the attorney to acknowledge to the buyer's bank the receipt of the funds in question, to avoid any possibility of the wired funds being recalled (a possibility most people don't know about).

You should also always have the sale anchored by a meaningful deposit from the buyer at the time you and the buyer enter into a contract for sale. Again, your attorney would be an appropriate party to hold the escrow.

One other thing you might want to do is to ask your attorney to clarify with the buyer's attorney whether the buyer has made an actual cash offer, or merely an offer not subject to financing. The two are not the same, and I have seen many buyers purchase on a non-contingent basis and then finance either for income tax reasons or to avoid tying up large amounts of cash While this method is legitimate, it would be appropriate for the buyer to make full disclosure as to the actual procedure on which he/she intends to embark. Do keep in mind, that even a non-contingent sale can run into trouble if the buyer's bank's appraiser disagrees with the purchase price you and the buyer have agreed to. In some instances, the buyer might make up the difference in cash and close the sale in a timely manner. In a worst-case scenario, the buyer might walk from the sale leaving you with his/her deposit as liquidated damages. Be sure to have a competent real estate attorney draft up the sales agreement, so that its language adequately protects you. The language relating to the buyer's deposit should clearly spell out when the buyer's deposit is at risk, what factors constitute nonperformance on the buyer's part, what aspects might give the buyer a legitimate escape from the contract (for instance, nonconformity of the property to applicable zoning codes, or title issues that would take more than a pre-agreed monetary amount or a pre-agreed amount of time to resolve). Also ask your attorney whether the language in the agreement gives you additional legal or equitable redress in excess of the buyer's deposit, should the buyer be in breach of the buyer's obligation to perform.

I mentioned before, the advantage of retaining an experienced real estate attorney. I cannot overstate this recommendation. Over the years I have seen parties to real estate contracts bring divorce attorneys, patent attorneys, probate attorneys and others that were simply not qualified to conduct the business at hand. The practice of real estate law is a highly specialized discipline and you should avoid entrusting the sale of your valuable home to any attorney until you are completely satisfied as to the attorney's real estate expertise.

Best of luck!
3 votes Thank Flag Link Sat Nov 5, 2011
Im surprised by your question. Anyone that owns a home of this value and does not want to employ a broker should certainly know their attorney's number.

Also it may be worth a million????? maybe its worth 2. I hope you've had muti agents in to give you a market value or hired an appraiser.
1 vote Thank Flag Link Sun Nov 6, 2011
Sarsfolfs,

Congratulations, its always nice to hear feedback and the results.
0 votes Thank Flag Link Mon Apr 2, 2012
I did hire an real estate attorney and the deal was quick and easy and fruitful. Thank you for all the comments and it was good advice.
0 votes Thank Flag Link Sun Apr 1, 2012
Hire an attorney to represent you. It wont cost that much and your interest will be protected.
0 votes Thank Flag Link Mon Nov 14, 2011
i wouldn't assume scam. We have put together a lot of cash million+ deals. They exist so not necessary to assume the worst. However, If you are getting a bad vibe and are worried about the legitimacy simply ask them to provide you with a proof of funds before signing a contract. If you don't have a broker you could have your attorney act as a 3rd party.

Good luck! Hope it works out :)
Web Reference: http://territory.com/
0 votes Thank Flag Link Fri Nov 11, 2011
Please update us we are curious if you had a real cash buyer or if was a scam Sellers beware there are many scammers out there and they are getting better all the time.
0 votes Thank Flag Link Thu Nov 10, 2011
This is a question for your lawyer. There are too many things to list here.
0 votes Thank Flag Link Wed Nov 9, 2011
John,

Price is controlled by what someone is willing to pay and their intended use.
0 votes Thank Flag Link Mon Nov 7, 2011
Wow .. this is a question that can have quite a few answers . Are you working with a Realtor and an Attorney in the sale of your home ? If you are not I would immediately get in touch with a good local agent and attorney to help you with this transaction.

When you say the home may be worth $1 million dollars I get the feeling you need a local agent, like myself, to conduct a market analysis to help you access the value of your home. Honestly I would never recomend anyone sell a property based on what they think the property is worth without some form of research. Price is controlled by the number of homes on the market, condition, location etc . You may own a piece of property that is worth more than the offer in hand. As of today (Monday November 7th there are only 10 single family homes in Cambridge that are over $900,000.

Please let me know how I can help.
0 votes Thank Flag Link Mon Nov 7, 2011
Have an attorney involved as soon as possible
0 votes Thank Flag Link Sun Nov 6, 2011
My agency also received a real check as a deposit ! We called the bank direct and they were already aware, We were lucky I had the experience to have a feeling something was not right !
0 votes Thank Flag Link Sun Nov 6, 2011
As Tom and Lois indicated, with real estate of this value you should have professional resources on call to help. Assuming you are a 'go it alone' sort of person, I've got to ask..."Where did the buyer come from?"

I've got two checks on my desk from Craigslist scammers. These scammers are good and getting better every week and they know to focus on big ticket items Going it alone may be fun, but there are real risks.
0 votes Thank Flag Link Sun Nov 6, 2011
im suggesting that you hire an attorney before you sign anything at all.
0 votes Thank Flag Link Sun Nov 6, 2011
Sarsgolfs,

Cash buyer or financing - you will need a lawyer. Best to consult with your lawyer prior to signing anything even if they drop a bag of cash on your doorstep.

I hope it works out for you!

Amy
0 votes Thank Flag Link Sun Nov 6, 2011
Please please remember that a cashier's check is not the same as verified funds. Also, a bank cannot verify a cashier's check just by looking at it or by your description over the phone. If something sounds too good to be true, it is.
0 votes Thank Flag Link Sat Nov 5, 2011
John is absolutely right. Proof of funds is so important. And, they should be verifiable funds. NOT an equity line of credit...Not a cashiers check (unless its deposited into escrow)

Also, a cash sale should be able to close quickly. If they are asking for 30 day escrow,be suspicious. Find out why. They may have a perfectly good reason,but also maybe stalling while they access funds, or find a buyer to roll the property over to at close of escrow for a higher price.

What do you mean , "the house maybe worth $1mil" ? Wouldn't it be good to know that for sure? The reality is, a house is worth what a buyer is willing to pay...in a CASH deal. If there's financing, a house is worth what the appraiser says its worth.

As a buyer, or a seller, an appraisal is a good idea. Is $1mil the buyers offer or your suggested price? For your protection,at the very least, a market analysis should be done by a competent real estate agent who knows your market. Be careful of in-accurate values found on internet sites.

Best of luck to you
0 votes Thank Flag Link Sat Nov 5, 2011
Without a doubt, proof of funds!
0 votes Thank Flag Link Sat Nov 5, 2011
Do you have an attorney ? Perhaps that would be the best thing to do first.
0 votes Thank Flag Link Sat Nov 5, 2011
They could be a "middle man" and not be someone with funds at all. They could be telling you that they have a buyer and than they will try to find a cash buyer investor and tell them that they have a good deal for them if they pay them a certain "finders fee" and than they will try to make a low offer to you and if you accept they will make money out of the deal. I actually know someone that does this all the time.
0 votes Thank Flag Link Sat Nov 5, 2011
verification of funds!!!!
0 votes Thank Flag Link Sat Nov 5, 2011
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