If you are paying Cash for real estate, especially here in in a high cost area like Westchester, I have some advice as a broker who has worked with many cash buyers. First, congratulations on havng the recources to pay cash. You are blessed.
Here are a few steps that will help you in your efforts.
- Get a statement for the account with the funds. It can be printed up from your online account, gotten from your bank branch or financial institution, or one of the statements they mail out periodically.
- Get a sharpie or magic marker.
- Take the sharpie or magic marker and black out your account number. Photocopy the document.
- Give the copied document to your agent so they submit it with your offer.
- If steps 1-4 won't suffice for some unfathomable reason, a letter from your personal banker, CPA or attorney stating that you have the funds in liquid form will do. This is frankly, more work, but it will suffice.
Failure to provide this proof with your offer makes you look like a gnu, and will out you as an amateur, as a true professional has proof of funds at the ready. Starting a deal out with undermined credibility is not an auspicious beginning.
Here is what will not substitute for steps 1-4:
- Impending lawsuit settlement, inheritance, or lottery winnings.
- A pre approval for a line of credit on another property.
- A letter in Microsoft Word from a hard money lender 200 miles away that you are "good for it."
- Vehement verbal assurances from your agent that you have the money, followed by how long the agent has been in the business.
- The promise of proof once we have a deal. No can do. Stoves never heat up without wood. Chop chop.
- Acting insulted we had the temerity to ask for such proof.
- Informing us that your broker is now in Tahiti, the fund manager needs their retina scan, and that we'll have something in writing on the first Friday of next month. Sorry Charlie.
Here's the thing: We aren't being nosy voyeurs who want to go through your financial medicine cabinet. We simply want to assure our seller client that you are a qualified buyer. Playing footsie with an uncredentialed cash buyer for weeks while we wait on contracts and inspections can cost us a real buyer, as we have obligations of disclosure that can scare other prospects away in the interim. This can cause a loss of time and significant money. In areas like Westchester and New York, real estate setbacks are crazy expensive.
No seller can seriously evaluate an offer without proof that the buyer can perform. Money talks. Hot air walks. But it's more than that. It isn't personal. It is business. It is protocol. It is how we play in the sandbox. It is fundamental. It is not a favor or peering into your personal, confidential life. When you go to sell your property, you'll want a colonoscopy on your prospective buyer, and I won't blame you. But I'll assure you that steps 1-4 will be more than enough.