By Robin Shapiro
Cash buyers should be CHERISHED. The cash buyer avoids roadblocks which afflict transactions when the buyer has difficulty obtaining a mortgage. There can be a problem with the Certificate of Occupancy: In Rockaway, there are homes which do not have C of O’s because they were built before C of O’s were necessary. This shouldn’t present a problem to the mortgage company – but issues with this can arise. Was there construction done without proper permits? Are there building department “violations?”
Cash buyers avoid paperwork snafus that can haunt buyers with even the best credit. Mortgage banks can ask for hard to source documents: proof that federal taxes were paid, last 12 months bank statements, last few months brokerage statements, last two years tax returns and W-2s, check stubs, CPA certification statement, etc.
Comparable sales don’t affect the deal for cash buyers because there’s no bank appraisal – no mortgage is needed! If the house doesn’t comp out, then the buyer can’t obtain a large enough mortgage. This may necessitate a renegotiation of the contract to a lower price. Alternatively, the buyer has to find additional funding. Sometimes the deal blows up with no penalty to either the buyer or the seller – except for the loss of time, effort, and some legal costs. Call me. Love, Robin..