Real estate has long been a stable investment for anyone seeking to amass a valuable portfolio. Though the real estate market has been slowed by past recessions, in many markets an investor with ready cash available has helped sellers who were attempting to sell property during a time when buyers are scarce. While it is true that a real estate investor can be the answer to any property situation in which finding buyers is hard, closing with a cash investor comes with its own unique set of potential problems. These tips for closing with an investor will help you and your clients when the day to finalize the sale arrives.
Get Ready to Move Quickly
When your buyer is a person who is ready to pay cash for a property, expect things to move fast. Depending on the property type or location, certain inspections or warranties may not be necessary. Also, when the buyer is not relying on a mortgage company to approve a loan, there is no need to wait on extra appraisals. A sale to a motivated cash buyer can be finalized as soon as the title company has checked the property for hidden liens or problems, so be prepared for the process to move quickly and stay organized. The last thing you want is a delay in the sale that is caused by you being caught unaware.
Ask for Proof of Funds
Do not be afraid to ask questions, especially if the buyer or his or her representative is not communicative. One thing in particular you should find out is if the buyer truly has the funds available to pay cash for the property. Occasionally a person who presents themselves as a cash buyer is actually securing a short term loan or another financing method to purchase the house. This means that closing could be delayed if the buyer is not able to get the alternative funding in time. Making sure the cash buyer really has the cash will help you avoid a last second headache.
Do the Math
Once closing day arrives, review the contract terms and payment amounts to make sure that the buyer and seller both pay everything that they are required to pay. Make or request an itemized list of fees and check the amounts you receive against what is owed before your client signs off on the sale. If your client has to pay off a lien or if the buyer has agreed to pay a specific bill, make sure everything is documented and paid for properly before everyone leaves the room.
Consult an Attorney
If you are having a difficult time working with a cash investor or do not like the contracts as written, a real estate attorney can help you with your transaction. The team at Adam Law Group is here to answer your questions and provide you with any assistance you need during a cash real estate transaction. Contact our conveniently located Jacksonville, Florida location today to schedule a consultation. We are here to provide you and your clients the help you need during your next big real estate sale or purchase.