Paying cash for a property

[WattleIdo]

What does it mean when s'one pays cash?
Do they pay cash at settlement or pay the whole thing when contracts exchanged?
Is this done by redrawing equity/ using offset loans?
Is it actual cash?
Why do vendors prefer it?
Sorry for Intro to Investing 101 question but I"ve wondered for years and still don't know.

 

[Marty McDonald]

Cash means no mortgagee in the process. This could be real cash or a line of credit secured by a different property or funds in an offset account, loan from family etc etc.

10% at exchange...balance at settlement. With finance needed you may require the standard 4 weeks etc but with cash you could settle a few days after exchange. Hence why can be a good bargaining tool.

 

[Rolf Latham]

paying cash means diff things to diff people

It may mean the contract is unconditional.......... and isnt subject to finance

How you SETTLE the transaction from there may be different

some peops may pay from savings via cheque ( no one pays in 100 dollar bills !) or from borrowings on another property via cheque

ta
rolf

 

[Terry_w]

A cash purchase is one where the purchaser doesn't need to borrow the money. They would just provide a bank cheque at settlement.

This is supposedly good for vendors because they are a sure thing. No finance rejection to make them pull out under cooling off period.

The property could still be mortgaged though.

 

[WattleIdo]

Thanks guys.

 

[Waldo]

It may mean the contract is unconditional.......... and isnt subject to finance

I've come across this a number of times - theres still a bank involved, but the agent just simply means that the offer isn't subject to any finance clause.