Reply to What does "all cash" mean?

Forum Index » Real Estate

Reply to "What does "all cash" mean?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous]An all cash offer is always hugely more attractive.  Anyone who thinks otherwise knows nothing.   It is a much surer bet and often can add a lot of flexibility.

I will go through a recent transaction we had to explain how it might work.   
- We put in an all cash offer, and it was accepted immediately.  No proof was necessary.
-We didn’t have the cash, but we had stocks valued significantly higher.
- We were selling a similarly priced property.
- If our house sale did not go through first, we would have to find the cash.
- Liquidating the stocks would cost hundreds of thousands of dollars in capital gains, so it was to be avoided at all costs.
- We sold all stocks that would not accrue capital gains and we arranged a loan with our brokerage against the rest to cover the rest of the cash needed.  That would have been an 8% loan for however long the gap was between the closing of our purchase and our sale.
- A buyer came in and really wanted the old house. They could do all cash (using whatever mechanism they needed to get liquid).  
- The buyer offered a one week close to help us avoid the loan.  This would be impossible if it wasn’t all cash.  Instead of waiting for other offers, we jumped and took theirs on the first day it was on the market.
- Between the stocks we sold and the cash the buyers handed us at the closing two days before our purchase close, we avoided the loan and paid in cash.

Getting a mortgage on either property to get the cash was not possible because of various legal/titling issues.  But we could have gotten the loan, closed, and then mortgaged if necessary, but that would have been very messy and would have occurred AFTER we had ponied up the cash at closing.

Note it is absolutely possible that we could have had a bidding war had we waited even a week, but for various reasons, it was more important for us to get this clean fast.  There is no way we would have just accepted the offer on the spot if it was not all cash.  Even if they hadn’t offered the fast close, we still would have taken all cash over a similar offer with the contingency because the risk of the buyers financing falling through was not worth it to us.[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics