I have a transaction in which I am representing the Buyers. The Sale is for around $200,000. The Buyer is paying $160,000 down in cash and is planning to get a mortgage for only $40,000. The lender who was expected to do the mortgage did not do anything to start the mortgage paperwork. The Buyers told me they would pay the other $40,000 cash but did not tell me the source of the additional funds were to come from a second mortgage or refinance on their existing home.
This escrow is scheduled to close in about 10 days. It looks like the refi/second will not happen in time to meet the closing date. The close of escrow date could have been met if the Buyers did in fact have the $40,000 to close.
Here in Arizona an "All Cash Sale" is really all cash and not cash to be obtained via any form of loan. We have an Addendum that is required to indicate an all cash sale. This addendum has a requirement for the Buyer to show proof of funds to close.
Using Cash from a Second Mortgage is NOT a Cash Sale.
In another instance, I was representing a Buyer who told me "we will pay cash." After showing them houses for three days and after they had found a house they liked, I thought we would write an offer. It was then that they told me they would pay cash -- after they sold their other house.
If you have to sell another home, it is NOT a Cash Sale Yet.
In a third instance, the Buyer offered to pay a good price for a vacant lot and expected the owner to carry. After the contract was accepted, it was discovered that the owner-carry would not work because the Seller could not settle an existing mortgage. The Buyer did finally made a cash offer to buy the lot, but that offer was only 62.5% of the price originally negotiated.
This one became a true cash sale with a humongous cash discount of 37.5%.
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