February 11, 2012

Cash Buyers

Donna Cox, a Realtor with Alfa Realty, recently closed another home sale with a cash buyer. I asked her about some tips she may have for the readers about purchases of this kind…

“Many buyers are electing to buy real estate for cash due to dropping home prices, a large inventory of foreclosed and distressed properties, and poor return on other types of investments. Another reason is because mortgage lenders have tightened credit standards which make the loan process more difficult and time consuming than it has been in the past few years.

Cash buyers can be very attractive to sellers, whether it is an individual, a bank, or mortgage company. This type of buyer usually does not come with contingencies, does not need time to secure traditional financing, and can usually close more quickly.

The only legal requirement for a cash purchase is to have the necessary verifiable money to purchase the property and close. There are still several important things to consider if you are a cash buyer:

Home Inspection – It is a wise decision never to purchase a property without a home inspection.
Appraisal – Since no lender is involved, an appraisal is not required; however, having an independent appraisal done is the way to make sure that the purchase price is reasonable.
Survey – A survey is always recommended for land, but it is also recommended for an unplatted property.
Hazard Insurance – It is always a good idea to have the property insured from the closing date and not put this off.
Flood Zone Determination – A lender will always checks on this and so should a cash buyer.
Termite Inspection – A termite problem can be a major expense. Termites are definitely an issue in the southern part of the country.
Check Previous Water Bills – Check recent water bills to make sure they are not uncharacteristically high. High water bills could signify a leaky or broken pipe.
HOA Dues or Condo Fees -Always ask about pending assessments or an expected increase in dues – also check the foreclosure rate, owner/occupancy rate, and the financial stability of the complex or association.
Owner’s Title Insurance – This is important for the cash buyer especially when buying a foreclosed or distressed property through a short sale.

Do not be insulted if the owner of the house requests written proof of funds at some point during the contract process. This is typical and the seller just wants to be sure that the funds are actually available before taking the house off the market for other potential buyers.”

If you are considering purchasing a home, call 334-324-3175. Donna will be glad to work with you whether you are going to finance the home, looking for owner financing or a cash buyer.

We are here to help!

Posted by: Denise Haviland