There is an old saying, “Cash is King!” but not everyone accumulates the amount of cash they would like or need to buy a home.
All is not lost, however, if you have other assets. The goal is to make “value” and to appease the needs of your counterpart in the transaction. In this day and age of economic uncertainty some folks are looking past the cash to other items of value and your asset proposal may be of greater interest to them than the cash.
Many people like gold, something that you might have in this mining state of Nevada. The ground for a renowned commercial property in Minden was paid for in gold at the request of the seller. They didn’t want cash causing the buyers to structure a cash into gold transaction to close the escrow. Your Kruggerands and other similar easily transferrable gold assets may come in handy for you.
If you sold something and took back paper, “owner carry,” you may be able to use that note to buy. If your note is seasoned with a good payment history and well secured you might find a seller looking for such a cash flow situation. The idea would be to secure his equity by something other than the property if you are getting a loan. That way the seller doesn’t have to be secured by a Second Deed of Trust, something they may not want to do.
Many moons ago we sold five parcels of vacant land for a client with little down and had him carry on each of them. He took those five notes and offered them on a historic mansion on the east side of Carson City and bought the property with zero down just using the notes. Everyone was happy.
Other assets that we’ve used to complete transactions include boats, cars, trucks, stock, pedigreed dogs, and cattle. In each all parties were pleased. It is always important to determine the motivation of the other party, but no such effort is as rewarding and satisfying as when you find the key to open the door for you and are able to use an alternative to cash asset.
If you have retirement accounts you might be able to pull funds to purchase from your account, or, in some instances, make a loan to yourself from your retirement account. Talk to your account supervisor and accountant to determine the consequences. When doing this, remember that you are still making an investment toward your future, the purchase of your primary residence. One advantage to this investment over others is the emotional return on the investment, you and your family get to enjoy the home that you make it for many, many years. In typical economic times, your equity will increase over time as you pay down your loan and the property value increases from upgrades you make and appreciation that naturally occurs.
Most people prefer cash, but don’t count yourself out for the lack thereof. Don’t get locked into lineal thinking if you have alternative assets, or a seller that wants something different. Be creative and try it out. You might be surprised at the positive results if you do.
Make sure your agent understands what it is that you have to offer, i.e.- the uniqueness, quality, special features, etc. A special sports car that you bought before the twins were born might appeal to a seller whose twins just moved out of the house. It’s all about timing.
When you look at a home look at the seller’s belongings for things that will tell you of their interests then look at your hobby items, collectibles, and other things of value that you have around the house that might appeal to them. You might find a creative way to minimize your cash needs during the process.
When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, CDPE, SFR, RE/MAX Realty Affiliates, 775-781-5472. email@example.com, www.carsonvalleyland.com.