Chatham County Real Estate Broker Eric Andrews answers Wyatt’s question – is there less paperwork involved in North Carolina real estate transactions when the buyer pays in all cash?
Speaker 1: Is less paperwork involved in a real estate transaction for a cash buyer?
Speaker 2: I mean, yes. Not when you do the offer to purchase. Real estate commission, office procedures, or whatever, you pretty much still have the same amount of paperwork. The only difference in paperwork, if you showed on the offer to purchase that you’re going to be utilizing a mortgage, then you usually have to have some kind of pre-qualification to attach with that. If you’re going to tell a seller I need a loan to buy your property, I’ve already been through the process. So here you go. So that’s a little bit more, but where there’s a lot more paperwork is at the real estate closing. So it’s much less paper to sign at the closing.
I tell my residential mortgage buyers that they’re probably… I tell them to loosen up their forearm, because they’re going to be signing their name probably 50 to 70 times. There’s a lot of paperwork as far as that’s concerned. But as far as the seller’s concerned it’s not really less complicated. The seller has to do the same thing. That’s what’s always so cute about being a land person and a carry agent calls me up and says, “We’re making an offer and it’s cash.” Well, okay. That’s great. But first of all, it’s land. You pretty much have to do cash anyways.
I had one good old country boy in Bennett said, “Eric, I get the same amount of money if it’s cash or a mortgage.” I mean, he’s getting cash when he sells the land. Even if you found somebody to do a mortgage, guess what he gets? Cash. People think it’s that… So one of the areas that becomes less complicated is, I mean, does a cash buyer still get a home inspection? Yes. Do they still want to see if the land perks? Yes. So the fact that their cash doesn’t make that process less complicated.
Is the buyer going to get an appraisal if they’re cash? I mean, they’re not prohibited from getting an appraisal. Just because they’re paying cash doesn’t mean they can’t. It’s rare, but they could still get an appraisal. So that’s one less hoop that we’d have to jump through whatever. But I think some people overemphasize how big of a deal a cash purchase. I mean, there’s still good things about it and the biggest thing is in this escalating market, there are things that wouldn’t appraise. If that buyer doesn’t have the ability to make up that deficiency, that’s where it can be, but not a huge difference between cash and mortgage until you get to the signing table.