I’m not sure I understand your question. If you get a loan for several hundred thousand dollars, I wouldn’t call that all-cash. I’d call it a mortgage.

Or you get a personal loan that is not collateralized by the house.

Do you mean that sellers will not accept offers contingent upon your obtaining financing? That's...unusual. Most people need a loan for a portion of the sales price. The seller receives cash, whether from the buyer or the buyer's lender.

I recommend working with a realtor. Interview 2-3.

I am CA, the seller pays the buyers realtor fees. Spending ~$400k with no previous experience is not recommended.

Do your due diligence.

"All cash to seller" means that the seller is unwilling to carry any mortgage. A loan from a bank provides the cash to the seller.

Yeah, OP is very vague.

Generally, those houses are nightmares behind walls or underground. As in, a lender will not lend for any reason-and those buyers know that.

For example, I sold my home FSBO to a neighbor as the movers were loading the van. Everybody is all wow, you are savvy not to pay a realtor! Um, no, my septic was original to the house and would have never passed inspection.

Thanks Julie but not even remotely the topic.

Why don't you tell us whereabouts you are in the country. I'm in California as well. Your question makes it sound (to me) as if you are an inexperienced buyer, and perhaps are confused by language in listings. A realtor can help you understand the listings.

Perhaps there is a location in the U.S. where buyers frequently do not "allow" purchasers to have a lender. I'm not sure why that would be. What a lot of sellers in a hot market MIGHT be wanting is a pre-approved buyer, and/or one that doesn't have a mortgage qualification contingency.

If you don't give us more information, then it seems unfair to complain, since people are throwing darts blindfolded.

Julie's example is why many sellers insist on all cash.

If by "the seller will not accept mortgage financing " you are meaning that the seller holds the mortgage if you find one expect to become the sucker and loose the property. You might find one honest person among the thousands that use this ploy to recover the property and resell it over and over to people who think they have found a deal. Not normally what happens. Any late payment even by a minute can and does mean forfeiture of property. If something happens to the property like fire or hurricane the owner will take any insurance payment and tell you goodbye. I saw that one happen in Florida after a hurricane.

its a very simple question that one of the first people to respond being Lulu understood with no problem. If you don't understand the question then don't respond. Its a finance question. Not real estate agent. question or a location question. If you feel like you're throwing a dat at a dart board then don't respond.

I’m a Realtor here in Northern Virginia, near Washington DC. There are many people who make an all cash offer on homes. When someone makes an all cash offer, we want to see the bank account(s) with the funds proving you have it. This is very common for investors to come in with all cash offers too, so not unusually in certain markets.

I don’t think the OP will be able to get a loan for $100,000(s) of dollars with no collateral. They need to find a Realtor to help them win in a multiple offer situation by being creative writing a competitive offer that helps their offer stand out from the pack.

Explain it then if Lulu understood the question since you would still have a debt to pay except it would be a personal debt. If you have such good credit explain why you would not want to have a mortgage since you would owe money at a higher interest rate if it is a personal loan.

Bizarre trolling.

Garden, when you say the seller won’t accept financing, do you mean the seller won’t take back a mortgage in lieu of the full purchase price or do you mean that the seller won’t entertain a deal where you use a third party lender to secure financing to pay the seller?

Do you have any other assets you can leverage? Or would a parent let you borrow funds and then you get a mortgage after the closing and repay the parent? Those are the only way I can see you being able to make that all cash offer. I assume you are looking to purchase in a very hot market.

Begging the OP’s pardon, but I think Julie gave an example that is very on-topic:

Julie wants to sell her house. It has a septic tank that she knows won’t pass inspection. If it won’t pass inspection, a buyer can’t get a mortgage. Therefore, Julie must find an all-cash buyer who doesn’t need a mortgage.

Ergo, the OP wants to buy a house. He/she has found several but all those sellers insist on all-cash. Could it be possible that these sellers have homes with flaws that will prevent a buyer from getting a mortgage?

I do see that from time to time where the seller will only accept all cash offers. They do not want any contingencies to close. If the market / area is hot, they can command it. The only other time I see a requirement for only cash offers it is when the actual structure is in horrible condition and the appraisal would not be great in the sellers eyes. Those are usually purchased by flippers in my area.

Littlebug... that is interesting. I am guessing appraisals are done differently in each state? One of my friends had a septic but only the private inspection report mentioned the condition. The appraisal just stated it had a septic. The appraiser did not test or really look hard at it. I only remember as there are not many that have septic in the LA metropolitan area and I was fascinated. My friend has since hooked up her house to the sewer.

"One of my friends had a septic but only the private inspection report mentioned the condition. The appraisal just stated it had a septic. The appraiser did not test or really look hard at it."

Appraisers don't check the condition of anything. The appraisal is on an as-is basis, presuming that everything is in good working order. If something has an obvious defect, it will be mentioned in the appraisal report and taken into consideration when valuing the property. This is precisely when buyers get an inspection -- to find out what is wrong that may affect their decision to go ahead with the purchase or opt out.

In California, there are laws on disclosure of defects. The seller must disclose anything and everything that may influence a prospective buyer as to whether or not they want to purchase. Examples would be faulty plumbing, a nonfunctioning HVAC system, a neighborhood dog that barks at all hours, drag racing that regularly occurs on the street, etc.

What would the interest rate on a “personal loan” for “hundreds of thousand dollars” be?

People are trying to be helpful on this site. If it’s a “finance question” maybe you should post your question on a financial forum.

I'm a Realtor. When a seller requests all cash s/he is looking for a buyer that will purchase not conditional on your financing the property. In other words the buyer will close regardless on the date specified. This doesn't mean that the buyer can't get financing. It means that the buyer will close with or without the mortgage. Usually its one of two reasons the seller won't take an offer with a financing contingency: appraisal value will be lower than sales contract price and the seller won't accept less OR the condition of the property won't pass minimum standards. Sometimes both reasons.

Yes, in our area (S Fl) the buyer has to show bank statements showing that they have the funds to purchase cash when the offer is made so the seller knows that they have the capacity to close. It in no way prevents the buyer from getting a mortgage. It only requires the buyer to close using cash if for any reason the lender won't approve the mortgage.

Look up the program that Ribbon offers. For a small fee, they will pay for the house in cash, and then when you get the loan, you pay them at closing. A couple of my clients have used them.

I would give you more details here, but i am off to a vacation in 15 minutes. Good luck.

A hard money loan typically works in these situations. They are common for real estate investors and should work. They are secured by the house but with a much faster turnaround, I can usually get funded in 3-5 business days, the current rate is 7%.

It is more like a personal loan than a mortgage.

Hard money is a resource, but skip the 7% rates and use Ribbon. A small fee, and then you get the loan at today's rates... about 3.5%!

"Cash" homes are often already discounted to account for the stipulation. Cash is used for many wholesale purchases. Your agent will help you craft an acceptable offer. Cash deals also often close in a shorter time period, often 15 days. Assuming you are bringing at least 50% down, would the seller carry the balance for awhile?

Make sure you hire a good real estate attorney that is working for you in this situation. You need to be certain the seller’s mortgage and any other loans secured by the real estate are paid at closing.

Hard money is a resource, but skip the 7% rates and use Ribbon. A small fee, and then you get the loan at today's rates... about 3.5%!

This depends on the situation.

My understanding of Ribbon is that they charge 3% of the sales price. Assuming that the average buyer needs 60 days to secure the financing and has 20% down the annualized rate for ribbon is 22.81%. Ribbon also limits the house price, but I am not sure what that limit is.

A hard money loan is going to have a fee of 1% of the loan amount plus .6% per month. Since you are looking at a 60 day max loan it is really just a 2.2% of loan amount versus 2.95% of purchase price.

Let's assume you have $100,000 and want to buy a $500,000 home. Ribbon is going to charge you $15,000. A hard money loan is going to be about $8,700. Now suppose you have $300,000 of the $500,000. The hard money loan is going to be about $4,350, while Ribbon is still going to be $15,000.

Now suppose you have $100,000 down but want to take the entire 180 days, Ribbon is going to cost you $15,000 and a hard money loan is going to cost you $18,000. What are the odds that someone with good credit can't secure a loan in 180 days? I suspect on average the loans get done in less than 60 days.

Note: I do understand Ribbon is offering a rebate right now. So it might be better for you assuming your house is not that expensive.

Maybe I received the wrong impression but my impression was that bragging rights about having paid for a house with cash was important to the OP. The other thought was what I wrote above that the OP wants the seller to carry the mortgage. The OP needs to investigate the difference in rates between the various types of loans. If they have to borrow cash to satisfy this desire the rate unless it is from a family member, not "family member", would probably be higher than the mortgage rate.

I have seen too many lose the house or other property and sometimes pay a stiff penalty when the seller carries the loan to ever be comfortable advising a person to do it.

Maybe I am misunderstanding, but I don't see anything about seller carrying the mortgage. It seems the seller is only entertaining cash offers, which is rare but not unheard of. I have listed homes before and said special consideration given to all-cash offers when I was about to spend time in a remote area.

They might simply want a fast close for various reasons and believe they can get it.

I don't see anything about the other parts of a normal transaction being disallowed.

An all cash offer means, no appraisal, no bank inspections and generally a quick closing. Sellers usually want this for a couple of reasons, 1. the house is priced higher than the bank will appraise it so a mortgage wouldnt be approved. 2. There is some material defect with the house and it wont be approved for financing. (maybe a bad septic, maybe no heating system etc.) I am a realtor and we had multiple offers on a home just recently. It went very high above asking and people were still asking to show. At that point, I knew the house wouldnt appraise and made it known that any other offers that came in, had to be cash offers.

If you obtain a mortgage at a lender, Seller still gets cash at closing. I'm not sure what the issue is here. Are you looking for a Seller who will carry financing? That's not going to be easy to find in this low interest rate era. Or do you mean you are in such a strong market that Sellers can routinely command all cash/quick closing/no contingency deals for desirable houses?

If you mean you are talking to Sellers who will only accept an all cash, no financing deal with quick closing in a week, you don't seem to qualify for that scenario, if you are "several hundred thousand" short, because you don't have that cash. You could try a personal hard money loan, but you will pay a high interest rate on that, much higher than current mortgage rates.

Interest rates on short term loans should be taken with a grain of salt.

It is a great idea to pay attention to interest rates rather than fees when you are talking about a 15 or 30 year mortgage, but when you are looking at a short term loan that situation changes. You need to estimate the entire time you will need the loan and calculate the total amount it will cost.

For example, suppose the OP needed to borrow $100,000 but only needed the money for 45 days in order to secure permanent long term financing. A 12% interest rate with no origination fee would be the same amount as a 4% loan with a 1% origination fee or a 0% interest loan with a 1.5% origination fee.