Cash Offer

[Harry Metzinger]

Hi BP, I am currently evaluating a property where I know a cash offer is looked upon favorably compared to purchasing with a conventional mortgage. I am in position to make a cash offer this week. Since the process from offer to close could move along very quickly, my concern is missing an important step or two along the way. If my offer is accepted, obviously I need to have the funds ready, get an inspection scheduled, line up homeowners insurance, and establish escrow with a title agency. I am curious what other aspects of the purchase I need to consider? Also, have you learned any valuable lessons in instances where you purchased w/ cash (I am including private money, hard money, and HELOC funds when I say cash)? Thanks in advance.

[Seth Nadreau]

The two biggest bits of advice I have with a cash purchase is to prepare all your proof of funds ahead of time. Copies of bank statements are good... but if you are buying as an LLC or corporate entity, you'll also need your articles of incorporation showing you (and your cash) are tied to the buying entity.

Line up an inspector quickly or even ask if you can have an inspector at the property before making an offer (then you can write an even stronger offer by minimizing or negating the inspection period!). If the property is wood frame or significantly dated, be sure to line up a termite inspection. Also, some locations require water/well inspections too. Rare... but it can happen.

Lastly, and most importantly, ALWAYS do a walk through before closing. Make time for it no matter what. I've only had one buyer refuse (just couldn't wait to close) and when he got to the house, it had become infested with bees. I mean... 50,000+ bees! An hour earlier, that would have been someone else's problem.