What Sellers Want

I would imagine an all-cash buyer has significant leverage.

If you're listing your apartment at $1 million and I have $850,000 in cash I can say to you: "here's an all cash offer for $850,000. Take it or leave it."

Smart sellers would (hopefully) realize that there is more certainty with cash than with cash + mortgage.

* In the end, price is price and your all cash offer at $150k below ask may not generate much interest, sorry to say.

* Sellers want a buyer who can pass the board, certainly, and a buyer who can get a mortgage.

* Sellers also want a buyer who has a lawyer ready to work on "due diligence" and proceed in an efficient manner towards getting a contract signed.

If an all cash offer at $150K below ask wouldn't generate interest why are sellers busy reducing their asking prices?

I would think boards are more interested in buyers who present all cash offers than buyers who incur debt to finance the purhcase. But, it could be boards are as financially illiterate as politicians.

Buyers are so jumpy these days, accepted offers don't mean anything. I would say that therefore adding speed going to contract would put a thumb on the scale -- all things being equal, a buyer who said they would return a signed contract in seven business days (or ten, given how slow this market it) would have a big, big advantage.

ali r.
{downtown broker}

^^ sorry, "is" not "it"

ali

fakeestate,
It depends on the apartment and the prior price reductions. There is no way to say definitively. I would say that you are overestimating the power of your all-cash offer versus a financed offer at a higher price. It is all the same to the seller, if he can get a buyer who can obtain financing versus an all-cash deal.

Boards want to make sure that the new owner has the financial resources to pay the maintenance on an ongoing basis. That's the only money they make over time, unless there is a flip tax.

407PAS,

Price is price, I agree, but there's some wiggle room where all cash is preferable at a slightly lower price. Depends on the seller of course, and I do think $150k is a lot, but I do think it can help in certain situations.

Right, there is some premium on an all-cash deal, but I doubt it is 15%, as in this case. It all depends on the actual unit and how overpriced it is compared to other units on the market. There is just no way to say for sure.

Perhaps $150K is a lot, perhaps it is not. All depends upon the situation the seller finds himself in. What if he bought his apartment 40 years ago at $100K and wants to dispose of the apartment quickly?

There are all sorts of situations I can gin up in which accepting an all cash offer $150K below asking would make sense for the seller. And of course there are other situations in which accepting that offer doesn't make sense for the seller.

fakeestate,
Agreed. Even people who bought their apartments 40 years ago want a market price when they go to sell them. That is just the way the world works.

It depends on how desperate the owner is, if they are in desperate need of cash immediately from the sale then an all-cash buyer would look very appealing as they would speed the closing process by skipping the need for a mortgage--hence accepting an all-cash offer at a much lower price point. This seems to work for desperate developers trying to get rid of inventory... go to their sales office with a briefcase of cash at 20% below :)

Cashiers cheque works too of course :)

AbatementBS,
As I mentioned in the other thread, with coops, you're talking about 60-90 days to get the lawyers to prepare the contract, the board package to be submitted, and the approval to be granted. Not exactly fast. I doubt if a cash offer speeds it up by that much.

Don't walk around with cash in this town unless you would like it taken away from you. There was the case of that guy who withdrew $250k at a Chase Bank, put it in a duffle bag, and was promptly robbed of it on the street.

Sellers want:
(1) Prospective buyer who is decisive and appears to be organzied and serious.
(2) Buyer who provides one-page summary of her finances with bid.
(3) Buyer who is unemotional and focused on deal as a business transaction.
(4) Buyer in a position to actually buy without a zillion poison-pill-like contingencies.
(5) Buyer who is consistent and apparently honest and acting in good-faith at all times.

Perfect kylewest.

kylewest,

Great list. I'm really focusing on the "tangible" stuff here that distinguishes one buyer from another. I certainly think actual preparedness is a big one there, which includes having a nice quick summary of your financials ready to go. Dropping contingencies can also be advantageous (though I would caution buyers to not put themselves in harm's way by trying to go the extra mile here).

"Don't walk around with cash in this town unless you would like it taken away from you. There was the case of that guy who withdrew $250k at a Chase Bank, put it in a duffle bag, and was promptly robbed of it on the street. "

I never heard about that. In fact, as far as I know its illegal to have more than $10k in cash on you (in NYC at least) wihtout some sort of permit or authorization.

I disagree that an all cash offer isnt compelling. Unless the buyer walks into an apartment pre-approved for the exact dollar amount to be paid, getting financing will always be an issue. These days its virtually impossible to get a mortgage for antying over about $700k in NYC (less elsewhere), so a buyer who has cash ready is strongly preffered. Certainly a coop board will slow things down a bit, however typically cash makes most problems go away very quickly.

I don't know about the permit, I have never heard of that. It is not illegal to carry cash.

Here is the story, sorry, the amount was only $150k.

http://www.nytimes.com/2008/02/23/nyregion/23robbery.html?ref=nyregion

"Only" 150K in walking around cash?

I'd like to have your bankroll!

The "only" was a joke. I don't walk around with more than $40, but this poor sap walked out the door with a duffle bag filled with $150k in cash. He was robbed at gunpoint, in broad daylight, and nobody stopped it.

This story reminds me of the ATM receipt that was posted on one of the blogs, $400k in a checking account. This receipt topped the previous record of $97k for a found ATM receipt. Just beer money.

consumerist.com/5127324/400k-atm-receipt-+-madison-ave-doin-just-fine

"I don't know about the permit, I have never heard of that. It is not illegal to carry cash. "

Nope, its against Federal law to have or transact in more than $10k without filling with Feds.

http://www.fincen.gov/forms/bsa_forms/

Ah, yes, you are right about that. Word to the wise, don't cooperate with anyone who is trying to get around those requirements or you could go to jail, as this real estate agent found out:

"Harriette Cooper, 52, Cedar Rapids, Iowa, a real estate agent, received the prison term after an August 9, 2006, guilty plea to one count of structuring a financial transaction in assisting a drug dealer to launder money in connection with the purchase of a house. Cooper was sentenced to more than two years in prison."

From:
http://www.mortgagefraudblog.com/index.php/weblog/permalink/iowa_real_estate_agent_sentenced_for_assisting_drug_dealer_in_money_lauderi/

PAS, quit stealing my thunder! That was going to be my Rule Six for negotiating: Don't be a drug dealer.

Bandito: I think that interpretation is incorrect. An individual can have or carry whatever they want. You can walk down the street with a wheelbarrow with $100mm if you choose, go to the teller, deposit the loot and walk away. It is up to the bank to report the deposit, not you. Alternatively, you could just walk circles around Manhattan the rest of your life. You just can't cross the border to Mexico or Canada without declaring it.

Patient09,

That is incorrect. First, the police will stop you and if they find more than $10k on your person it will be confiscated. You will then need to go to court and provide documentation about why/how you had it. They do this as a measure to prevent drug dealers and mafia types from laundering money. Secondly, you would not have been able to acquire the $100m (legally), without first registering the transaction with the Feds.

You are correct about crossing the border however, but that is a different reason. All funds must be declared prior to entering/exiting the country to make sure the appropriate taxes have been paid. The way people (such as jewelers) are able to walk around with $10k (plus) is documented in the link; you basically need to inform the Feds you are working in an all cash business and immediately declare all movements of said money.

What a seller wants...
Buyers that know how to carry cash...
Without getting robbed.
OK

Bandito: you seem to be an expert on this, I am not. But, it is perfectly legal to go to Chase and get more than 10k in cash. They have done that for me several times when I was in the midst of a construction project. No paperwork, no signing anything. So, you can certainly carry what you choose, what you get stopped for is something I know nothing about. Even if there is concern about illegal activities, (as you suggest, harassment etc..) it would be cleaned up and you can go about your business, assuming you are not engaged in a criminal activity. Whats wrong with this scenario?

Patient09,

You just nailed it; the act of taking the money out prompts the bank to report the transaction to the feds (depending on the amount). Since you had a legitimate reason for the cash, even if you were stopped you wouldnt have any issues. The difference between your scenario and a person who randomly shows up with the cash is that you can verify where you got it (bank), AND what it was for.

UES, you are misinterpreting the law.

There is no limitation on the amount of cash dollars you may have on your person or in your possession.

You may enter or leave the United States with any amount of cash you wish, so long as you declare it.

You may withdraw or deposit any amount of cash at the bank that you want, but for amounts in excess of $10K (or amounts structured at or above $10K), the bank (or other financial institution (e.g. Amex office, Western Union) will be required to file a form with the Treasury.

I dont believe that is the case. You need to have a valid reason to be carrying the money, otherwise the police can legally confiscate it and you need to get it back via the courts.

UES: can you site any statute? The police can't just "stop you" and take property without an authorizing statute and probable cause to believe a crime has been committed. Can you tell us what NYS law you are referring to or what federal code section you are basing this claim on, or is it more "what you've heard" or "this happened to a friend of my dentist" kind of thing.

Kyle,

The RICO Act allows for the police to confiscate funds they 'believe' have been involved in drug trafficking or money laundering. Thats not to say that they WILL, however they have the legal right to do so.

UES, I see what you're saying. But you have really misapprehended the law on this. Without probable cause that a crime has been committed, the police cannot arrest you or seize your property. And if someone is found simply carrying cash, law enforcement may not do anything beyond engage in what is called a "common law right of inquiry." Basically, they can do only what any citizen can do. And if the "suspect" tells them to f-ck off, there's nothing more they can do. Carrying the cash in and of itself is not probable cause ("p.c.") for seizing the money or person. Further, RICO requires, among other things, at least one or more "overt acts" by a suspect in furtherance of a conspiracy. Carrying money is not a conspiratorial act in and of itself. Law enforcement can't just arrest people and seize property and then figure out if there is a crime. The rendition of events you fear is more apocryphal than reality based.

If you were to be arrested for simply carrying money, it wouldn't be such a bad thing, though, since what you would gain in a wrongful arrest suit against the NYPD would outstrip by far any return you could get by conservatively investing the funds.

Jackstraw,

My understanding of the statute is that they cant arrest you for having the money, only confiscate it and require you provide documentation in order to get it back.

UES, I think you don't understand the statute correctly. What you refer to as NY's "RICO" law is actually found inPenal Law Title X, The Organized Crime Control Act, Article 460 - Enterprise Corruption. There is no statutory provision for what you claim the police can do, and frankly as you describe it such seizure is about as blatant a violation of the 4th Amendment as I can imagine.

A little knowledge of the law is a dangerous thing.

Kyle,

I never once inferred that RICO was a NY specific law. It provides law enforcement the ability to seize funds believed to have been gained or to be used in commission of a crime. As such, carrying large amounts of cash around with no documentation or stated purpose opens one up to having those funds seized. Your interpretation of the law in entirely up to you, so we will just need to agree to disagree on what in actually means in practice.

Actually carrying large funds is not a crime in and of itself and in the U.S. an individual need not offer any explanation. It is up to the government to prove wrong-doing. Not for the individual to prove innocence. Unless you are an attorney versed in this area, I suggest you stop. We aren't going to agree to disagree because you are wrong on this. On RE opinions or ideas about what the economy holds, we can swap views, but this is not an opinion. It's a legal question with an actual answer. And yours isn't correct.

Unless you are a criminal attorney versed in the intricacies of the RICO statute (which not all attorneys are), then your opinion is no more correct than mine.

I have always been amused by how they arrest criminals due to tax evasion because the IRS wants their tax money, regardless of the source, ill-gotten or otherwise. The IRS supposedly does not cooperate with other law enforcement agencies. They just want their share of the money.

I'm with kylewest on this one, I do not believe the simple act of carrying large amounts of cash is a criminal act or one that can get you arrested, but I'm not a lawyer either.

UESBandit--I actually am "versed" in the area. I am wary on here of writing anything that would be construed as providing legal advice so I try, when a question calls for legal info, to keep it general.

I think what gets blurred and confuses people about the carrying money rules is that there is a filing requirement for transfers of over certain amounts. If one endeavors to avoid triggering the filing by getting clever (e.g. two withdrawals: one for $3000 and one for $9000; or multiple $9999 withdrawals or transfers every 6 hours for 3 days), or attempts to hide the movement of funds over the limit, or goes to the airport and simply lies and does not declare the cash, seizure and possibly arrest may result. By the time the stories hit the papers, many of the details and technical reasons why they police did what they did are omitted and it sounds like they just arrested someone for having a lot of money on them. Reporters are no better than the general public at understanding RICO, OCCA or general criminal statutes and the stories get mangled more often than not. The gist gets across, but that's it.