Cash Buyer Where Cash Means Cash
Ever have a cash buyer with real cash? No money in the bank but paper cash and ready to buy a home. I ran across one of them. Seemed to have a legitimate business, but when it came to writing an offer, I found out a new meaning for cash buyer. I explained money for closing had to come in the form if a certified check, so the funds had to be deposited. Because the figure was more than $10,000, the bank may put a hold on funds for up to 10 days. I called the Title company to verify the situation.
Of course the government has created a number of laws in an attempt to track money obtained from drug sales, scams, and other crimes. Follow the money is a reality. But what happens when a legitimate buyer mistrusts banks and for their entire life has stashed away their cash. As a Real Estate Broker, we are not allowed to interpret any law or give legal advise on any law. All we can do is refer that person to an attorney. Real Estate Agents know the best Real Estate Attorneys. There are a number of ideas an Attorney can suggest. An Attorney also carries insurance relating to the transfer of funds. As do Title Companies. Getting advice from your Title Company is the first step. Then move onto the Attorney. If the client has an Attorney, that is where you want to send them, if their Attorney has a background in Real Estate. In the transfer of funds, that may not be a necessity.
Funds in the amount to purchase Real Estate may draw the attention of a number of government agencies. Be prepared to answer questions. Purchasing real estate with cash in a bank or other account can be accomplished in a number of days. But cash in the form of dollar bills may see issues. This is why is it so important to ask for proof of funds in the form of letter from the financial institution or copy of an account statement with the account number removed, of course. Most institutions remove the account number, but be careful, some statements include the account number. That account number should not be shared with anyone and it is not a good idea to keep any sensitive information on your computer of phone. If an account number is present, a good photo editor can take it off. You may have to convert a file from PDF to JPG to take off the number, but that is a small step to ensure security. There is more than enough information and instructions on the Internet for the most popular photo editors to accomplish that task. Many editors have step by step instruction videos. Then make sure to permanently delete any files with account numbers present.
Proof of funds needs to accompany every offer to purchase. What are you going to do with cash? Take a picture. What does that prove? Rule number 1 when working with buyers is to verify funds. You need written verification of funds when submitting a written offer to purchase.