Is this a "cash offer"?

What happens to a cash offer if finance falls through and your using a $2 company? Just the company gets sued and you loose your $2 company and deposit (plus the associated costs of setting up a new company)?

Are there any legal fees involved?

Assuming you've structured it correctly you're generally in the clear. Likely end result is just the lost deposit, especially once the other party realizes the company has no assets
 
What happens to a cash offer if finance falls through and your using a $2 company? Just the company gets sued and you loose your $2 company and deposit (plus the associated costs of setting up a new company)?

Are there any legal fees involved?

You cannot make a cash offer if you have a finance clause. If the deal cannot be completed your deposit will be at risk of being forfeited.

SYD
 
Am I missing something here? Why's there so much discussion about the definition of a cash offer. I thought it was clear unless I've misunderstood it. I've understood it to be a buyer that can literally walk to the bank and withdraw cash if they wanted to, be it unleveraged or leveraged cash through a LOC. Yes you could make an unconditional offer, but at the end of the day it's still subject to financing: in this case the buyer is simply very confident but they could still end up in hot water if it falls through. A confident buyer is still nowhere near as powerful as a buyer with cold hard cash in their bank ready to go at a moments notice.

Put it this way - a desperate seller has just had a margin call. They are willing to sell their 1m house for 500k, but they need the money in literally 5 days - can you find the money in this time? This is where the power of a cash buyer comes into the picture. Happy to be corrected but this is my understanding of the strongest negotiating positions from top to bottom:

1) Cash buyer
2) Unconditional buyer but still needs financing
3) Buyer subject to financing


It seems many in this thread are saying 1 and 2 are identical? If I was in a bind, I know which one I would take...there's no pre-approval in the world that can move faster than a guy with a wheelbarrow full of money.
 
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All well and good to say that but as a seller how do u determine difference between 1 and 2?

I've bought a few places with no finance clause but then actually used a bank to fund it at settlement
 
I don't want my answers to appear smart, but am just curious about why you would cancel an offer, unless you have changed your mind. I have only ever heard of people cancelling offers when they have signed a contract, and the vendor has not signed it. Perhaps the vendor is waiting for a better one. In the meantime, purchaser decides they don't want the house after all, and rather than risking the vendor signing the contract and completing the contract, they ask in writing that it be cancelled or withdrawn. In that scenario, you need to cancel it in writing in case the vendor decides to sign it and you then are locked in.

The initial purchaser for my mum's house that has just gone unconditional today (yeay!!) did just this. Flew up from NSW, made an offer, mum countersigned higher. There is no way this contract could have come together until the purchaser coungersigned (or initialled) the counteroffer, but she called the agent from the airport to ask that her offer be withdrawn.

In this case, it was (I imagine) a notice to the agent not to bother following up to see if she wanted to initial the countersignature and make a contract, and allowed the agent to forget her and continue to market it.

Having never bought in NSW I don't know the pros and cons of verbally agreeing to a price, when that can be gazumped. I like the certainty of knowing that once two signatures are on the contract, only the purchaser can pull out on any clauses. The vendor cannot agree to a price, and then change his/her mind and accept a higher offer.

Our agent has a daughter who has just moved to NSW from Queensland and it is driving her crazy, the way the system works down there :D.

Added: I think what I am really wondering about is that I understand that in NSW the vendor could be phoned with "Mrs X wants to offer $500K cash unconditional". Vendor says "that is great, bring around a contract". In the meantime, they could be offered $501K and decide to take that offer instead. Is this correct?

In Queensland that original $500K offer is signed by the purchaser before the vendor even knows about it (generally) and presented straight away and instead of a verbal "yes" the vendor signs the contract. They can then not accept a higher offer.

Sneaky agents always try to get you to initial the contract after you sign it before the seller signs it
 
A cash offer is not necessarily an unconditional contract as there can be other get out clauses on the contract.

Our daughter has just bought a house in Queensland. All negotiation was verbal, and when everything agreed they arranged to sign the contract the following day. I must admit I was a bit nervous until it was all signed and sealed, but all went well.
Marg
 
All well and good to say that but as a seller how do u determine difference between 1 and 2?

I've bought a few places with no finance clause but then actually used a bank to fund it at settlement

The promise of a stunningly quick turn around. Yes the buyer could be lying but then again anyone could lie about anything. What generally happens is agents get to know you. My mortgage broker is well known by many agents as a cash buyer and he's their go-to person when they have a desperate seller. For many, many years now he's never had to search for a property - they just magically come to him, and when they do, they are carrying incredible discounts.

I really feel the OP is being mislead here. There are confident buyers who sign unconditionally. Then there are cash buyers. They are two different beasts.
 
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