How to Protect Your Cash Buyers

 There are special consideration and issues for a cash buyers:

1. Proof of funds - do not provide confidential bank statements or brokerage account statements; instead have the buyer's personal banker or financial adviser write a letter to confirm the buyer's ability to pay for the property.

2. Title insurance - always recommended for a cash buyer, but remember that there will not be a simultaneous issue discount, because there is no loan or loan policy. The premium will be about $3.60-$4.00 per thousand of the sales price.

3. Hazard insurance - make sure that the coverage begins the day of closing. If the property is vacant or will have a tenant, the buyer should disclose this to the insurance agent to make sure that the proper coverage is provided.

4. Flood insurance - since there is no lender to order a flood certification, the buyer should inquire and investigate whether flood insurance is required. A new survey is a good idea.

5. Inspections - the buyer's home inspector is especially important, because there is no lender's appraisal or inspector to provide a second opinion on quality, condition, or value.

6. How to take title - sometimes a buyer has credit issues or income tax liens, making it difficult for the buyer to get a mortgage. Make sure the buyer knows that if title goes into his/her individual name, any existing liens or judgments will attach to the new property; the buyer may want to set up a trust or LLC.

7. Estimating closing costs - since there are no lender fees, make sure that the seller's allowance for closing costs is completely used or otherwise credited back to the buyer. Repair credits, unused closing cost credits, and rebates are acceptable on a cash purchase, plus the allowance can be used for a survey, home warranty, HOA dues, condo dues, even tax prorations, as long as this is spelled out in the Special Stipulations.

If you need a good closing attorney for your closings or need legal advice please contact Gillen Joachim at NEEL & ROBINSON, ATTORNEYS AT LAW, LLC  (678) 631-1872