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  HAROUTUNIAN LAW OFFICE

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Made a Cash Offer.  Can I Still Use a Loan?

4/2/2019

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Question:  I am buying a home after recently making a ”cash offer”.  Now, I want to borrow the purchase funds.  The Seller is now complaining.  What are my rights?
 
Answer:  I will let you in on a little secret…there are two types of cash offers.  Each one provides different levels of confidence.  However, this is rarely understood by the parties. 
 
From Seller’s perspective: a cash offer confirms the buyer will not use a lender at all.  This conveys the most confidence and is likely what the Seller assumed about your situation.
 
From Buyer’s perspective: a cash offer, is simply not contingent upon the Buyer obtaining financing.  The buyer may use his own cash or borrow the purchase funds from a lender.  If this type of “cash” buyer fails to get a loan, he will lose his deposit – but still walks away from the deal. 
 
In your case, the Seller likely can’t terminate the deal, because of your loan.  It isn’t a violation of your contract.  However, give your Seller confidence in your ability to get a loan.  Share your good credit score, or your mortgage commitment when it comes in.  Remind the Seller that he will get your deposit if you fail to purchase.  Hopefully, the deposit amount is sufficient to calm the Seller’s nerves. 
 
Attorney James Haroutunian practices real estate, estate planning and business law in Billerica at 630 Boston Rd and can be reached with questions at 978-671-0711 or via email: James@hlawoffice.com.   
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