Everyone (except a lender) loves a cash closing, whether you are a listing agent, selling agent, seller or even buyer. When a buyer is paying cash, you don’t have to worry about loan approvals, loan delays, providing mountains of paperwork for the lender or a dreaded loan denial. However, a cash buyer will still want to make sure certain things are done before closing
- Insurance. Since there is no lender to require a buyer to provide proof of insurance, it is up to the buyer to make sure they have coverage as of the closing date.
- Home Inspection. It is always a good idea to find out any issues a property may have, even if the buyer isn’t going to require the seller to make any repairs.
- Appraisal. If the buyer is concerned about the value of the property, it is a good idea to get an appraisal and make sure the contract is contingent on the property appraising for at least the purchase price.
The buyer has completed all of the inspections they require and have the money ready to wire to closing, but doesn’t have time to drive across town…Since it is a cash closing and there is nothing that the buyer will sign that will need to be recorded, the title company will probably not need original documents. If that is the case, it may be possible to email documents to the buyer to print and sign, then scan back to the title company. However, there may be a couple of documents that need to be notarized before they are emailed back. That will save time for the buyer and not necessarily require them to take off work for the closing. Of course, there may be instances where the cash buyer will need to sign in person, but in most cases, that will not be required and can be handled electronically with the buyer also sending the funds by wire transfer.
A title company still has the same responsibility to a cash buyer as it would with a buyer who was getting a loan. If the buyer is getting an owner’s title policy, the title company would search the property and clear any liens or other issues it finds in the search, before closing. The title company should also inform the buyer if there will be any unusual exceptions in the title policy. When there is a lender, they would probably not allow any unusual exceptions (like lack of access to a public road), but a cash buyer is depending on the title company to inform him or her of those issues prior to closing. I would typically tell the buyer about any issues myself and if the buyer still wanted to close on the property, have them sign a form acknowledging that I am informing them of the issue in writing.