I have inherited 2 houses in So. California both are mortgage free. One is a rental the other we live in. I know nothing about buying a house and we want to buy a small house in Pennsylvania for $70000.00. The seller wants cash. How do I do this? Also have a small amount of savings but do not want to use it.
If they really want cash, you notify your bank in advance of the amount and have it put in your account, then you both sign the paperwork at the bank and after everything is signed you have the bank hand them the money. Guarding it after that is entirely their problem.
Personally, I would consider this a stupid request and tell them to have their lawyer discuss it with my lawyer in the hope they can be talked out of it.
As far as where to get the money: Same as for any purchase, find a bank willing to write a mortgage for you on this new house.
What you choose to do about the other two houses is an independent question. You can sell one or both, but that may take money so you probably won't finish doing so before needing to pay for the new house. Of course when they do sell you can use the money toward paying down/paying off the new mortgage.
I've been prompted to turn my comments into an answer -
Disclosure - I am a Realtor. I work for an investor for whom an offer on a house he will buy describes him as a "cash buyer." This phrase most often means one of two things -
The buyer has funds that are liquid enough to either wire the cash or produce a cashier's check in some number of days, a week or two would be common. (And not wait for another house to sell)
The other point of this is that the seller is not willing to finance the property. The flip side being that the seller will take a down payment and let the buyer pay over time.
I am nearly 54, and I'm open to the fact that language changes. Definition follows usage. In personal finance, we refer to a stock/bond/cash mix. Here, the word "cash" simply means money such as money market or short term T-bills. A 60/30/10 mix doesn't mean I have a briefcase of cash under my bed for that 10%.
To answer the OP, I'd ask the seller does "cash" mean -
- You want to leave the closing with all your money?
- You wont accept a buy who needs a mortgage contingent on selling heir home?
- You expect a very fast closing, and will not wait for me to pull money from my other houses via mortgage or HELOC?
Keep in mind, when a seller has a buyer who needs to sell their home first, there can be a chain going a few levels. When it's "turtles all the way down" it becomes too risky to the seller.
No, you are not out of luck. I'd open a dialog with the seller or their agent if any. Sales is all about understanding what each person's goal is.
To give the seller cash at the closing, you will need to borrow the money ahead of time, which means a mortgage is out. A bank will only make a mortgage if they get the deed. Therefore, you will have to borrow a different way, such as through a more-expensive home equity loan.
i think and what i understand when a house seller is asking for cash, thats means he is looking for a ready and quick buyer doesn't rely on mortgage and its long process. cash means a certified check for sure, but not physical money in suitcase!