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Old 11-25-2020, 02:15 PM   #41
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Yikes, sorry didn’t realize it was so long.
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Old 11-25-2020, 02:18 PM   #42
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One other note on the POF (proof of funds) that I just remembered.

*IF* you are submitting the POF with your offer, do NOT send over something that is much more than what you are offering. Example: You submit offer for $200K on house listed at $220K. DO NOT SEND a POF that shows that you have $250K in the account! Reduce as needed to show the price you want to pay plus 1-2% for closing costs/etc.
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Old 11-25-2020, 02:49 PM   #43
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Yea, buying a house for cash is quicker than buying a car for cash. The sellers of my home gave us the keys when we made/accepted the offer. They were fast to get out of dodge before we noticed the home was built on a rattlesnake den.
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Old 11-25-2020, 04:13 PM   #44
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Iíve done that, but not until my home equity (asset) was about 15% of my portfolio. I really have enjoyed getting rid of monthly payment for piece of mind.

I did this in 2014. S&P 500 is up over 50% since then so clearly a mortgage would have yielded better return. I have no regrets given total AA, but point it out for those who still need to build net worth.
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Old 11-25-2020, 04:16 PM   #45
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Originally Posted by jkern View Post
It makes me laugh (or cry) when someone mentions purchasing a house for $150K. My daughter is currently looking for a house up to $1M. It's virtually impossible to get. One came on the market a few days ago for $900K. Within days there were 25 offers is it's going to sell for $1.1m. The house is old, small and in a barely middle class neighborhood.


Well that depends on where you live. In Michigan, you can easily have a nice 3,500 sq ft house in town and a lake house for $1.1m.
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Old 11-25-2020, 04:36 PM   #46
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Our realtor has pressured us to not pay with cash because if we want to back out of a deal he says there's always some way to "blow up" a mortgage application. I don't agree and plan to pay cash if we ever find a house we like.

We made a cash offer last year on a house which we lost because another offer was even higher over the asking price than ours was. I had a hard time getting an asset verification letter from Ally Bank. They took their sweet time issuing it and if our offer had been accepted that might have been a wrench in the gears. We saw another possibility earlier this year and I asked for another letter which never did come. Good thing we didn't actually make an offer on that one.

A question for others who've been through this: did the seller ask for verification of assets? Did it have to be cash, or could it be the balance in a brokerage account?


Iíve bought 2 houses this way, although in Midwest where they are reasonable and was never asked for verification. Just showed up with check in hand at closing. I asked for home inspection, but not appraisal. I do think it helped provide seller comfort deal could close without issues. This was in sellers market, but not hot enough for multiple concurrent offers.
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Old 11-25-2020, 05:00 PM   #47
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Paid cash also. Never regretted it one day. I don't care about the interest rate scenario. I sleep better at night.
Normally I would be there with you, but we when we moved to Oregon a couple of years ago, because of the clergy housing allowance exemption, it made a lot of sense for us to take on a mortgage because that allows us to exclude housing costs from federal income tax. We just reworked our mortgage to reset the rate from 3.875% to 2.25% (our CU is awesome), 10 year loan with 8 years left.

If not for the clergy housing allowance, we would have paid all cash, but as it was we still put over 2/3 down. If we paid all cash, we would be paying a lot more in income tax.
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Old 11-25-2020, 08:03 PM   #48
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Originally Posted by GalaxyBoy View Post

A question for others who've been through this: did the seller ask for verification of assets? Did it have to be cash, or could it be the balance in a brokerage account?
We paid cash for the last two houses we bought.

The first one we bought at an auction and that transaction required no verification of assets. Just a personal check for 10% of the purchase price the day of the auction and the balance via a personal check in 45 days or less.

The second house we bought was listed by a realtor and they did ask for account statements (with the account numbers blacked out) showing that the funds were available.
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Old 11-25-2020, 09:09 PM   #49
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The sellers of my home gave us the keys when we made/accepted the offer. They were fast to get out of dodge before we noticed the home was built on a rattlesnake den.

Sorry for the bad luck but it was just too funny. I hope you did manage to get rid of the den with minimal effort/money. I would definitely hire a competent inspector before making a contingent offer for my first purchase.
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Old 11-25-2020, 09:24 PM   #50
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Weíve bought five homes with cash. They all went smoothly with relatively quick closings. Weíve sold two of those, with one paying cash and one with a mortgage. A big difference in days to closing.
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Old 11-26-2020, 06:42 AM   #51
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I didn't exactly buy a house with cash but I did build a house in the mountains with cash. I designed it and swung the hammer as cash became available. I only had the timber frame built for me. It took me about 8-10 years though. Sold it as it became too much work to maintain from a distance. Taught me that if things got rough I had the experience to build a small house to live in although I may be getting a little too long in the tooth now.


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Old 11-26-2020, 07:24 AM   #52
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A question for others who've been through this: did the seller ask for verification of assets? Did it have to be cash, or could it be the balance in a brokerage account?
We just provided screen shots of accounts intended to be used. Then when offer was accepted, we transferred to the "hub bank" and got the cashiers check for closing.

Spent 10 minutes closing (most of this was chatting)... Super easy.
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Old 11-26-2020, 09:20 AM   #53
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Proof of Funds requirement is pretty typical, particularly in a competitive marketplace.

Have done both recently - last cash closings were waaaay easier and faster. Also, I felt like I was in control, not some group of evaluators at mortgage companies/financial institutions.
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Old 11-26-2020, 11:45 AM   #54
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We bought our retirement house for cash. There were 10 offers on the house, all above the asking price and ours was the 3rd highest, but the only one for all cash.
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Old 11-26-2020, 12:06 PM   #55
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We bought our retirement house for cash. There were 10 offers on the house, all above the asking price and ours was the 3rd highest, but the only one for all cash.
Was your offer considerably lower than the highest offer meaning the seller gave up significant bux? Or, was your offer close to the highest offer meaning the selling gave up only a small amount for the convenience of a cash buyer?

Personally, I'd prefer a cash buyer. But, I wouldn't give up very much on the selling price to get one vs. a pre-qualified buyer using traditional mortgage financing.
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Old 11-26-2020, 06:13 PM   #56
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It seems like most of the real estate world is set up for the benefit of the brokers: realtors, lawyers, banks and their mortgages, etc. When paying cash, itís you, and your pot of money, against the world.

You can avoid signing up with a realtor, and the obligation of going through the realtor, if youíre proficient with the internet. Do your own searches on Realtor/Redfin/Zillow.com. Look up taxes, assessed values, etc. in city and county databases. The more realtors (buyer + seller) involved, the more people to go through, like when making an appt or scheduling anything. Theoretically, this eliminates @2.5-3% of cost.

The seller will prob have an agent. When you decide on which house, and discuss $ offers, bring up the point of no buyer agent eating into realtor commission (usually 5-6% shared between buyer/seller realtors). Seller realtors, unless you push the issue, will have already planned to act as your, the buyerís agent and collect the whole 5-6% (dep. on sale price). So you insist that they not, and pass some of that savings to you.

When you look at a house, be sure to have a well-charged phone (for taking pics) and comfortable/not dress-up clothes, in case you need to crawl somewhere.
Have your check-book available, in case you decide to make an immediate offer.
Itís useful to have funds in separate account/s that are approx to offer price. Eg. I wouldnít want to give a statement showing $2m in the account, if the house is only $250k. $275k would be enough, purchase price+ closing costs + utilities for a year. I usually print statements, use permanent marker over the account #ís, then zerox the statement, so that the account # canít be read/felt through the paper (yes, Iím paranoid). Keep them in a folder, and then it makes it easy to tour a house, make an offer, give your check deposit and hand over statement/s for proof of funds.

Yes, cash purchases can be completed very quickly. Once you provide a legit offer, and proof of funds, all parties will be happy to meet in a few days and collect your money. But donít rush it. All cash offers have an advantage, so respect your timeline needs.

Be sure to schedule an inspection, with an inspector you find, not a sellerís recommended inspector. Now would be a good time to look into this so that when you need one, youíve figured it out already. Also, unless you grew up in the house, go step-by-step with the inspector for the entire inspection. Bring a well charged flashlight, a well charged phone for taking any necessary pictures, and lots of questions. If you donít know any, then check a book out of the library and familiarize yourself with the bowels of a house. Youíre paying a couple to few hundred dollars, so might as well get an education for yourself.

The inspection is a good contingency clause to add to your offer, as a way to back out of the offer, should you need to. Also, when you put down a deposit with your offer, put down enough to show your serious, but not too much that would hurt, should you change your mind and back out. If you back out b/c of an inspection related reason, then you would be able to get back your deposit.

Be sure to get title insurance, unless you feel super comfortable doing the legwork. And good luck!
Lots of good advice.
I also go up on the roof, and I follow the inspector the whole time.
Finally I put down $1,000 deposit, Yes the real estate agents whine, and complain like crazy, they want to handcuff you into the sale, and earn interest on it (?). I've bought 3 houses this way, nobody has refused to sell me a house with a $1K deposit.
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Old 12-01-2020, 04:35 PM   #57
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A question for others who've been through this: did the seller ask for verification of assets? Did it have to be cash, or could it be the balance in a brokerage account?
For my purchase, which was only 50% down ($500K), they did require verification of assets. Post 9-11, they have to track all of the $ and transfers. I used statements from my checking and brokerage accounts for verification. $ sent from overseas accounts had to be tracked from the foreign institutions, all the way to the account that the funds come from to purchase the house. They want to make sure you aren't laundering $, or using terrorism-related $.
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Old 12-01-2020, 04:48 PM   #58
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We took out a HELOC to buy our rental properties with cash. And yes, we've been asked for bank statement to prove we had enough assets.
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Old 12-01-2020, 05:03 PM   #59
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Have bought several houses, even commercial property cash. Never regretted it. Less fees, less paperwork, less insurance hassles (commercial prop). Also have a guaranteed return on your money, with mortgage interest.
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Old 12-01-2020, 05:03 PM   #60
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Cash is King!

We have bought our last 2 homes for cash. We went from a 1 hour, 30-40-page title signature meeting to a 2-page remote meeting which was wonderful. And not dealing with a bank/lender is a huge advantage. You can insure the home the way you want, instead of the way the bank demands!
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