Bringing cash to meetings to further motivate owners?

10 Replies

This morning I was thinking how I can increase my closing percentage....

What's everyone's opinion on bringing, say, 5k cash to meet with a home owner in attempts to further motivate them to get the property under contract right there?

Just simply ask them the question, "Would $5,000 in cash today, be of benefit to you while we wait to close on your house?"

Is this legal? Moral?

@Jared Vidales

It's your money and there's nothing wrong with using it to encourage a seller to make a timely decision. As to whether you should actually give the seller cash without a deed in hand is another question altogether.

If you are willing to lose that $5K, then go for it.  Many sellers do not realize what liens are on their property so you may be offering less than what is owed.  I would personally entice them with showing them the money but only hand it to them once you know for certain that title work is OK as an option fee.

You better know for sure you have a killer deal on your hands before you do something like that. And be careful who you do it around too, there are some really crazy cruel people out there bro.

Nah, i think its a great idea. Have your attorney customize an agreement. Just realize the real trade off... You are giving them $5k in exchange for a "sale" of a property. Basically no contingencies. And if you back out or they back out you are completely dependent upon their morals and ethics to get your money back. This is why escrow companies were born. A check however can be tied back to their agreeing to a contract. By them cashing it they agree. That is enforceable.

What about this...
get your hard money or private money lender agreed to fund that specific property and present your sellers with a contract that says cash deal, $5000 deposit within 24 hours, no contingencies, and closing within 10 days.

Thats what we do and its pretty motivating to anyone who wants to move quickly.

Good luck

@Jared Vidales  - carrying around thousands in cash around people you don't know terribly well sounds like a terrible idea.

Originally posted by @Justin C.:

What about this...
get your hard money or private money lender agreed to fund that specific property and present your sellers with a contract that says cash deal, $5000 deposit within 24 hours, no contingencies, and closing within 10 days.

Thats what we do and its pretty motivating to anyone who wants to move quickly.

Good luck

Sounds much safer.  How often does it backfire?

Originally posted by @Jesse T.:   Sounds much safer.  How often does it backfire?

If it backfires, then we don't go to closing and haven't lost anything.  Its not exactly what OP is describing but its the next best thing that I have found.  We have a standard purchase agreement that our attorney drafted for us that outlines this process. At the time of agreement, I get the sellers phone number and email and  text immediately upon dropping off the check which is done on the way to work the next morning.  That promptness I have found is key in pushing the envelop closer and closer to closing. This way they can go and sign their part of the agreement or have their lawyer call mine and start the process.  We close 10 days from both parties signing the agreement.

The alternative that I was describing by including a check is that by cashing the check, they are agreeing to the terms.  I have never done this but have heard of people doing it.  I would never give cash, but a check is traceable and can be brought up in court if it ever got that far.

- J

carrying around that much isn't safe.  Ppl will hurt u for much less. 

It helps to educate a seller on what a cash offer really is. Bcuz most of them think all transactions are CASH!  They don't understand the hoops that come with financing a purchase. Like inspection & etc...

Hope that helps. But do what u choose,  I have no fear of carrying money or protection.  But u can't win them all

So they have your $5k cash, let's say something comes back on the title search and they owe too much, or maybe they don't have the right to sell (we have had this happen multiple times).  Then you have to track them down and get your cash back?

Cash is a very hard transaction to track.  What if they spent the money, and have no assets, then even if you did want to pay a lawyer thousands to get it back it wouldn't be there.

Originally posted by @Ralph Pena :

carrying around that much isn't safe.  Ppl will hurt u for much less. 

 What???  I never leave home with my wad of hundo's!!!  :)

Originally posted by @Ralph Pena :

carrying around that much isn't safe.  Ppl will hurt u for much less. 

It helps to educate a seller on what a cash offer really is. Bcuz most of them think all transactions are CASH!  They don't understand the hoops that come with financing a purchase. Like inspection & etc...

Hope that helps. But do what u choose,  I have no fear of carrying money or protection.  But u can't win them all

"Cash deal, $5000 deposit within 24 hours, no contingencies, 10 days to close." 

Not much to educate.  The deposit and signed agreement is dropped off to my attorney the next morning.  All they have to do is show up and sign their part of the agreement and they get their money in 10 days at closing.  The goal is to keep it as clean and simple as possible for them.

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