Every seller loves an all cash offer right? The seller figures one less hassle since the buyer doesn’t need a pre approval letter nor is there an appraisal issue because one typically isn’t done. BUT there are other issues to consider and the listing agent has additional responsibilities when you do receive an all cash offer.
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Recently my brother who still lives in our home state of Michigan received an all cash offer on his riverfront home. My brother didn’t counter the original offer since it was to low (his agent didn’t explain to him that there is no harm in countering even if you counter back at full asking price to see how serious the buyer really is) so the buyer stepped in and revised his offer and raised it closer to the list price. Finally my brother calls me because he wants to counter the offer but was unsuccessful reaching his agent and the response deadline was about to expire. After he review the details of the offer and what he wanted to accomplished I helped him frame counter offer and included in the counter that the buyer was to provide proof of funds. It took a bit of convincing that proof of funds was important since he didn’t see the need for proof of funds, he is a bit too trusting of people but finally he had his agent write up the counter as I suggested. The buyer signed it and they were under contract and my brother entered escrow on his next home as well. But the buyer’s agent never provided my brother’s agent with proof of funds nor did his agent secure the good faith deposit per contract. When they were at 21 days to close the buyer can’t perform. Now the buyer is stating he needs 2 weeks to provide proof of funds and then a week to close and he has nothing to lose since he didn’t even provide a good faith deposit so my brother has zero negotiating power. Ring, ring it’s my brother again giving me an update on the failure to close per contract and the events that transpired. Again I go over the contractual side of the deal and help him craft an addendum to the contract doubling the good faith deposit, check to be retained by seller’s agent and extension of 30 days to provide proof of funds and close or forfeit the good faith deposit.
The moral of this story is: SHOW ME THE MONEY! This whole issue could have been avoided had my brothers agent did his job and asked for and received the proof of funds at the time of the offer. Real estate can be easy if it’s done correctly and a nightmare when details are missed. I just closed a recent all cash purchase for a client and we provided the proof of funds with the submitted offer so that there was no doubt we had the ability to close the deal (and sellers seeing the cash is there waiting for them can help motivate them to accept your offer over others). Our offer was accepted and we closed in 21 days. So if your selling your home make sure you get proof that their funds are there and ready and make sure the good faith deposit is properly handled so you can avoid the extra stress some sellers have to go through when details aren’t covered correctly.