A cash buyer is anyone who has the cash available to buy a property without the need to secure financing by giving a mortgage, whether to a bank or to a seller (a.k.a “seller financing”).
While property sales transactions tend to be much quicker and easier for a cash buyer than for those who need to use financing, the same due diligence needs to be conducted as if it were a mortgage closing.
A qualified real estate attorney like Bruce R. Jacobs can handle the duties of a settlement agent, acting on behalf of buyers who are using cash.
Here is what the closing agent will do for those buying property with cash:
Review the Purchase and Sale Agreement
An attorney will review the Purchase and Sale Agreement (P&S) to ensure your rights and interests are protected and you aren’t paying any expenses that would otherwise be a Seller expense. For example, some buyers may want to flip the property to a new or different buyer. If the contract does not allow for an assignment of the contract, then the buyer must close in their own name or risk losing their deposit.
Conduct a Title Search of the Property
A real estate attorney will conduct a title search of the property for you. Past defective deeds, judgments, divorce decrees, foreclosures, probate, unreleased mortgages, and other liens can impact the title to the property. An attorney will be able to have these items removed as an impediment to the buyer receiving clear and marketable title.
Obtain a Municipal Lien Search
Your real estate attorney will conduct a Municipal Lien. This search will determine if the ad valorem taxes are current and if there are any outstanding tax certificates against the property.
Create a Settlement Statement
An attorney will prepare a settlement statement, which will summarize all fees and charges of the transaction into an itemized document. A settlement statement will include the gross sales price and the costs the buyer incurred in closing the transaction, including a lien search, title search, closing fee, recording costs, title insurance premium, title endorsements, Survey, estoppel fee and prorations for property taxes and maintenance fees.
Handle Disbursement of Funds
The attorney will disbursement the closing funds to the appropriate parties, including realtors, prior mortgagees, associations, the county for real estate taxes, and any other outstanding lien holders.
Record The Closing Documents
The deed, affidavits and all other paperwork necessary to clear title will be recorded in the public records of the county where the property is located. The deed is the document that transfers ownership of real estate. It identifies the buyer and seller, provides a legal description of the property, and is signed by the person transferring the property and their signature is witnessed and notarized. Recording this deed is important as it will place the world on notice of the buyer’s interest in the property, which is the purpose of recording documents in the public records.
Issue a Title Insurance Policy
An owner’s title insurance policy will be issued by the attorney. This will provide protection to the new homeowner if someone were to make a claim that they have an interest in the property. While title claims are not common, they can be expensive to resolve. Court intervention is sometimes needed to clear a title claim using a procedure called a quiet title action. Fortunately, if you have title insurance, the title insurance company will hire an attorney at its sole cost and expense to remove the title defect.
Closing attorney Bruce R. Jacobs can handle these duties in a timely and efficient manner. Bruce can also act as your power of attorney, should you be unable to attend closing for any reason.
Contact Bruce today to find out how he can help you with your cash closing. You can reach him by phone at (954) 961-1993 or by e-mail to schedule an appointment and learn more about your rights as a cash buyer. He offers a free initial consultation.