Hi, I’m Beth with TB Properties Buys Land. Today, I’m going to answer a question that we were just asked recently on a very large transaction. Somebody in our audience had been watching the videos and reading our blog, and they had a question about what TB Properties Buys Land means when we say we purchase land with cash. When we think of cash, we think of dollar bills, or $100 bills for a large transaction. So, when it comes to real estate and saying that we’re going to pay in cash, what exactly does that mean?
It’s important to note that when it comes to real estate, there’s two main methods of purchasing property. The main way of doing it is working through a lender. When you’re buying your house, it’s a large transaction, typically, it’s $100,000 or more, and you’re going to a lender for that. Maybe it’s a bank, maybe it’s a credit union, or maybe it’s a private lender.
The second option, the most common option is paying in cash. What that means is that instead of having to get a loan, you’ve got funds immediately available. Funds are in the bank and they can be wired over immediately when Title is ready or you can write a cashier’s check like a bank check and send that to the title company. So, when you’re saying that you’re buying in cash, what you mean is that you’ve got funds immediately available, and you’re not waiting on the lender to approve that purchase.
And why exactly is this important that you’re able to pay in cash? The answer to this is that when you are working with a mortgage lender, typically, they have to make sure that what they’re lending against is going to make sense to them. So, they have to go and hire an appraiser. Appraisers are in short supply, so they’re waiting on this appraiser to be able to get out there, and to make his assessment, and to get back with the lender. Then, the lender has to do the part of the work. Maybe there’s a surveyor that needs to get out there and has to be involved. And now you’re waiting on the surveyor as well. You’re paying the appraiser, you’re paying the surveyor and this takes time is what this amounts to. It takes time.
With a cash transaction, title companies can close a lot faster. We work with Title Companies because they’re a safe third-party intermediary. They prepare the paperwork on both sides, they’re going to make sure it gets recorded with the county, and they’re going to be able to provide you with title insurance. What’s also important is that they’re going to only accept certified funds from the buyer.
TB Properties Buys Land, what we have to do is either wire funds directly from our bank account, or we have to send a certified check from our bank to them. They will not accept a suitcase full of $100 bills from us. They’re only going to accept these certified funds directly from the bank. Now, how the title company pays you as the seller is a whole other story. But most of the time they’re going to send you a check, or they’re going to wire funds directly to you. I don’t know of any title companies that will provide you with bills in terms of cash.
I hope I’ve been clear, when TB Properties Buys Land states that we’re going to pay you in cash what that means is you’re going to receive funds right away from the title company. We’re going to be able to close a lot faster. We will be wiring funds directly from our bank account to that title company, or sending a cashier’s check directly to the title company. And they will pay you as soon as that transaction closes. Because we pay in cash, we can close a lot faster.
Right now, things have been really slow. With a lot of title companies, we’re seeing title companies close in six weeks, eight weeks, they’re being delayed. It’s really been frustrating. But with cash transactions, they’re able to close a lot faster, 3, 4, 5 weeks. The slow ones are closing in six, with cash and two plus months with a lender, or even longer. Hopefully, that makes sense. If you have any questions though, feel free to reach out to us. We’re eager to hear back from you. Thanks.