The home buying process can be quite complicated as there are many parties and a ton of paperwork involved. You also have to consider timeframe and the cost for everything from the agent and the mortgage to the interests for the property.
All of these reasons are why an all-cash deal is often a lot easier, and it can save you a lot of money in the long run. In this article, we’ll talk about what an all-cash deal is and how the process works. You can refer back to this article when you’re looking to go forward with an all-cash deal for yourself in the future.
What is an all-cash offer?
An all-cash deal is when the buyer offers to buy the house outright with a single payment. This allows the process to be incredibly simple, as the paperwork involved in the process will be greatly minimized. The buyer can pay with cash upfront, bank transfer, or with a cashier’s check. An all-cash offer can usually save a lot of the buyer’s money, as they won’t have to worry about the interest rates from the lender. What’s more is that the deal can be finalized within days instead of a course of 30 to 40 days like a regular mortgage. If the buyer can afford to do this, an all-cash offer is usually a better choice than a mortgage for the mentioned reasons.
What is the standard real estate closing timeline?
// Closing time for an all-cash purchase
The buyers will usually have around two weeks to pay for the property for an all-cash purchase. This is enough time for the escrow company to deal with the transactions and get all the associated paperwork done and clear the properties of any liens it may be under.
// Closing time for a financed purchase
Because there are more documents that have to be processed, a financed purchase will typically have a longer processing time than for an all-cash purchase. It can take up to 60 days before the paperwork can be finalized, and that’s to be expected with any mortgage deal.
A step-by-step guide to an all-cash deal:
1. Sign the initial contract of agreement
Before any action can be taken, both the buyer and seller have to sign an agreement contract that includes all the details of the deal.
2. Verify proof of funds
The buyer has to provide the buyer with a proof of funds so that the seller knows that the buyer actually has enough money to purchase the property. This is done to protect the seller from being scammed, and it’s an incredibly important process. If you’re the buyer, you need to make sure you check all the documents very carefully to ensure that everything is correct and complete. This is done so that you don’t have to worry about going through a legal battle in the future.
3. Hire title and escrow companies
To ensure that the transaction goes correctly and that the money is processed correctly, it’s in your best interest to work with an escrow company. They can help to address the liens on the property if there’s any, and they can help to make sure that all the legal documents are in order before the money is transferred to each party. A property cannot be legally transferred to a different owner if it’s under lien, and the title and other third-party auditing company will come in and make sure that there are no dangling liens. Escrow companies and insurance companies work very closely with one another, as they both offer both parties peace of mind that their assets are being protected.
4. Undergo a home inspection process
Once the property has been cleared of any liens, it can then be legally sold. At this point, to make sure that both parties are happy with the condition of the house, a home inspector will be called in to check whether the quoted price is fair for the buyer.
5. Review and sign closing documents
Now that everything is checked out, the only thing left to do is to sign the closing document and finalize the purchase. Listed below are the two documents you are expected to sign:
// Final closing instructions
The closing instructions are usually signed when the escrow company is called in. If you haven’t signed it at that time, you will have to sign the document now. This is to ensure that both parties understand and agree to the final terms of the purchase and that the transaction is irreversible unless anything illegal arises.
// The deed
The new deed is signed at the closing deal when the seller receives the full sum of money they’re owed. Once the deed is signed, it confirms that the buyer is now the legal owner of the property and that they are fully entitled to the home.
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