Buying house for cash, sellers requesting proof of assets

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TheGreyingDuke
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Buying house for cash, sellers requesting proof of assets

Post by TheGreyingDuke » Fri Dec 07, 2018 10:17 am

The title says it all, what sort of documentation would you give? What details to obscure?

Assets are mostly all at Vanguard if that matters.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells

Chip
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Re: Buying house for cash, sellers requesting proof of assets

Post by Chip » Fri Dec 07, 2018 10:21 am

I had an identical situation years ago. I showed the sellers a page from my brokerage account with the account number blacked out, showing more than enough assets to buy the house. That was enough for them. I didn't give them a copy.

Lafder
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Re: Buying house for cash, sellers requesting proof of assets

Post by Lafder » Fri Dec 07, 2018 10:22 am

Have Vanguard provide documentation that you have assets in excess of X dollars.

No need to share your total assets.

lafder

Gill
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Re: Buying house for cash, sellers requesting proof of assets

Post by Gill » Fri Dec 07, 2018 10:24 am

I had a similar request and showed them only my IRA account which had a value exceeding the price of the house.
Gill

WhyNotUs
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Re: Buying house for cash, sellers requesting proof of assets

Post by WhyNotUs » Fri Dec 07, 2018 10:27 am

Same here
I own the next hot stock- VTSAX

MikeG62
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Re: Buying house for cash, sellers requesting proof of assets

Post by MikeG62 » Fri Dec 07, 2018 10:32 am

Lafder wrote:
Fri Dec 07, 2018 10:22 am
Have Vanguard provide documentation that you have assets in excess of X dollars.

No need to share your total assets.

lafder
^This what I would do.

I would ask Vanguard to state in the letter that you have liquid assets (cash and MM and other cash equivalents) which exceed the amount you are paying for the house. It’s nice sand generic and doesn’t show more than you need to show (you have enough cash and cash equivalents to buy the home without borrowing).
Real Knowledge Comes Only From Experience

SQRT
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Re: Buying house for cash, sellers requesting proof of assets

Post by SQRT » Fri Dec 07, 2018 10:47 am

Some issue several years ago. I had the funds in a savings account so told my bank to write a letter to the seller documenting my account balance. Probably more info than they required. My balance was well in excess of purchase price so the bank could simply have said “Mr X has in excess of $xxxxxxxx on this date”. But I didn’t really care.

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TheGreyingDuke
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Re: Buying house for cash, sellers requesting proof of assets

Post by TheGreyingDuke » Fri Dec 07, 2018 11:06 am

Turns out you can generate a "letter" right from the web page:

My Accounts>Statements>Create Valuation report>Create a valuation report>
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells

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8foot7
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Re: Buying house for cash, sellers requesting proof of assets

Post by 8foot7 » Fri Dec 07, 2018 11:25 am

A simple letter from your institution that says “Customer has available funds in cash to purchase a home priced at $nnn,nnn as of the date of this letter.” Signed by an employee of the bank. That’s really all the sellers need to know.

btenny
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Re: Buying house for cash, sellers requesting proof of assets

Post by btenny » Fri Dec 07, 2018 11:45 am

I was the seller back when on a similar cash home sale deal. The buyer said he had the money and wanted to close on December 20th. He showed the title company some papers and to assure me he did have the cash. The title company then said the money would have to "age" in place after he transferred it to his bank. Then his bank could wire transfer the cash to the title company and close the sale. The original sale documents and title documents were set for December 20th. The title company said this "ageing of the cash" would delay the close by two weeks to Jan 4th. I was not happy due to the new year tax issue but accepted it rather than fight and cause other problems.

So cash may not be real cash and take time to deliver. Beware...

Good Luck.

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8foot7
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Re: Buying house for cash, sellers requesting proof of assets

Post by 8foot7 » Fri Dec 07, 2018 12:01 pm

btenny wrote:
Fri Dec 07, 2018 11:45 am
I was the seller back when on a similar cash home sale deal. The buyer said he had the money and wanted to close on December 20th. He showed the title company some papers and to assure me he did have the cash. The title company then said the money would have to "age" in place after he transferred it to his bank. Then his bank could wire transfer the cash to the title company and close the sale. The original sale documents and title documents were set for December 20th. The title company said this "ageing of the cash" would delay the close by two weeks to Jan 4th. I was not happy due to the new year tax issue but accepted it rather than fight and cause other problems.

So cash may not be real cash and take time to deliver. Beware...

Good Luck.
I think I would have found a different title company if said company insisted a Federal Reserve wire transfer needed to "age"

Nowizard
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Re: Buying house for cash, sellers requesting proof of assets

Post by Nowizard » Fri Dec 07, 2018 12:10 pm

Almost immediate closing and large, non-refundable earnest money should do it.

Tim

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Re: Buying house for cash, sellers requesting proof of assets

Post by bungalow10 » Fri Dec 07, 2018 1:20 pm

8foot7 wrote:
Fri Dec 07, 2018 11:25 am
A simple letter from your institution that says “Customer has available funds in cash to purchase a home priced at $nnn,nnn as of the date of this letter.” Signed by an employee of the bank. That’s really all the sellers need to know.
This. I sold an apartment building to someone for cash and they provided a letter from their bank indicating they had assets in cash to cover the purchase price.
An elephant for a dime is only a good deal if you need an elephant and have a dime.

btenny
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Re: Buying house for cash, sellers requesting proof of assets

Post by btenny » Fri Dec 07, 2018 8:25 pm

8foot. The title company was not asking for the age in place. I think it was the local bank that was issuing the $$ transfer to the title company. The issue (the way it was explained to me) was some of the money was coming from another investment house in New York together with some money in Arizona. So the bank wanted to make sure that the transfers were all OK.

student
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Re: Buying house for cash, sellers requesting proof of assets

Post by student » Fri Dec 07, 2018 8:44 pm

TheGreyingDuke wrote:
Fri Dec 07, 2018 11:06 am
Turns out you can generate a "letter" right from the web page:

My Accounts>Statements>Create Valuation report>Create a valuation report>
This is nice.

suemarkp
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Re: Buying house for cash, sellers requesting proof of assets

Post by suemarkp » Sun Dec 09, 2018 12:23 am

I just did this and printed out a monthly bank statement and blacked out all account numbers. I also blocked out my address but left my name.

I was tight on money so I wanted it out of Vanguard to know exactly how much I had. I wanted to make sure everything cleared and was in hand, but it also had to be in soon enough to get captured by the next bank statement date. That was the close one -- the money went in just after the previous statement date, and the next statement showing it was generated 2 days before I needed it. In hindsight, I could have received more interest if I left it in the Vanguard MM for another 2 weeks.

If you don't want the money sitting in your bank account for a while, or you just missed the statement cutoff date, then you'll need to try some of the other options listed above.
Mark | Kent, WA

msk
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Re: Buying house for cash, sellers requesting proof of assets

Post by msk » Sun Dec 09, 2018 1:40 am

The seller can always end up being the loser. My case as seller back in England in the 1980s. Huge run up in the RE market. Put my house on sale at absolute peak. Feverishly hot market. Buyer came in within a week. Offer accepted. Buyer demanded that I take the house off the market pending "exchange of contracts", about a fortnight. I demanded proof of funds availability. He provided a letter from his bank stating that Dr... has sufficient cash to cover GBPxxx (price of house). RE market went into steep dive in the next few days. I never heard from the buyer again and in England they have a "cooling off period" that protected his change of mind. I finally sold the house 6 months later at a 30% lower price :annoyed

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catdude
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Re: Buying house for cash, sellers requesting proof of assets

Post by catdude » Sun Dec 09, 2018 1:54 am

I've seen this from both sides of the fence. Years ago when I sold a townhouse, it was very much a seller's market. I got five offers for the house, one of which was all-cash. That buyer provided documentation of assets without my agent having to request it. She (the buyer) didn't want there to be any doubt of her ability to pay for the house.

After renting for 18 months, I bought another townhouse in my current area. I still had all that cash from the sale of my prior house a year & a half before, sitting in my bank account. The builder (this was a newly built house) asked for documentation of assets. What's interesting is that my agent advised me to not show assets significantly above the sale price. She said I should document that my cash on hand was just barely above the price. She was concerned that if the buyer saw that I was flush with cash, he might try to upsell me, i.e., pry more money out of me. As it happened, it was easy to comply with my agent's advice... my bank account balance was just a wee bit above the sale price, and I didn't provide any other documentation to them, such as investment and retirement account info, etc. etc.
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jfn111
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Re: Buying house for cash, sellers requesting proof of assets

Post by jfn111 » Sun Dec 09, 2018 7:08 am

We deal with this all the time. One of my investors is with a wealth management group at US Bank and she just has the bank sign a letter that states she has the necessary funds to make the purchase.
Other clients have taken a screen shot of their bank or brokerage accounts. We redact any account numbers and submit that.

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8foot7
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Re: Buying house for cash, sellers requesting proof of assets

Post by 8foot7 » Sun Dec 09, 2018 7:29 am

btenny wrote:
Fri Dec 07, 2018 8:25 pm
8foot. The title company was not asking for the age in place. I think it was the local bank that was issuing the $$ transfer to the title company. The issue (the way it was explained to me) was some of the money was coming from another investment house in New York together with some money in Arizona. So the bank wanted to make sure that the transfers were all OK.
Ah, so the transfers in from the investment houses to the local bank were probably ACH, which could be reversed for fraud etc. that makes sense. Sorry for confusion

OnTrack
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Re: Buying house for cash, sellers requesting proof of assets

Post by OnTrack » Mon Dec 10, 2018 12:44 am

Make sure you know what form of payment will be accepted by the title company. I had a contract that stated that either wire or certified check was acceptable and I had made plans to pay with certified check. At the last minute, the title company said they would only accept a wire transfer regardless of what the contract stated. Apparently they did not trust certified checks.

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Re: Buying house for cash, sellers requesting proof of assets

Post by RudyS » Mon Dec 10, 2018 9:33 am

OnTrack wrote:
Mon Dec 10, 2018 12:44 am
Make sure you know what form of payment will be accepted by the title company. I had a contract that stated that either wire or certified check was acceptable and I had made plans to pay with certified check. At the last minute, the title company said they would only accept a wire transfer regardless of what the contract stated. Apparently they did not trust certified checks.
Probably because a "certified check" like any piece of paper could be forged. Would a bank check, verified by phone, be better?

OnTrack
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Re: Buying house for cash, sellers requesting proof of assets

Post by OnTrack » Mon Dec 10, 2018 2:38 pm

RudyS wrote:
Mon Dec 10, 2018 9:33 am
OnTrack wrote:
Mon Dec 10, 2018 12:44 am
Make sure you know what form of payment will be accepted by the title company. I had a contract that stated that either wire or certified check was acceptable and I had made plans to pay with certified check. At the last minute, the title company said they would only accept a wire transfer regardless of what the contract stated. Apparently they did not trust certified checks.
Probably because a "certified check" like any piece of paper could be forged. Would a bank check, verified by phone, be better?
In my case, the only form of payment they would accept was a wire transfer.

bluebolt
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Re: Buying house for cash, sellers requesting proof of assets

Post by bluebolt » Mon Dec 10, 2018 7:43 pm

Nowizard wrote:
Fri Dec 07, 2018 12:10 pm
Almost immediate closing and large, non-refundable earnest money should do it.

Tim
This is close to what I did as a seller. I asked for documentation. They declined. I asked for 5% earnest money, 20% more at P&S non-refundable with no contingencies. They accepted.

Didn't need an immediate closing since I would have kept 25% of the purchase price if they backed out.

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