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PAYING CASH FOR DC REAL ESTATE

Yay, you have cash to pay for your DC real estate purchase! Cash can make the difference in a multiple offer scenario and it simplifies the process for any transaction There are a few things you'll need, though. We outline what sellers and listing agents expect from a cash homebuyer in Washington DC. Read on, and be sure to reach out to get started on your purchase!

EARNEST MONEY DEPOST (EMD)
You’ll still need it.  Home sellers require all DC home buyers to include an Earnest Money Deposit in their offer. This sum is forfeited by the buyer and awarded to the seller as damages if the buyer defaults on the contract (unless contract terms dictate otherwise). The EMD amount is typically 7% – 10% of the purchase price,  more under certain circumstances. The Earnest Money Deposit is held by the title company of the buyer’s choice in an escrow account. It will count towards the total purchase price of the property.
 
FUNDS VERIFICATION LETTER

The seller will expect a Funds Verification Letter from the buyer’s banking/financial institution confirming that available funds exist to cover the entire purchase price of the property plus closing costs at time of offer. This letter should be on the institution’s letterhead and signed by an officer of the institution (generally a Vice President or General Manager). The letter should not include hyper-personal information such as full statements of accounts or account numbers.

LENDER PRE-APPROVAL

Some sellers and listing agents may request a pre-approval from a local, reputable lender in addition to a Funds Verification Letter. They see this as a third-party verification of your self-substantiated representations. We will attempt to negotiate this.

THE ADVANTAGES OF PAYING CASH FOR DC REAL ESTATE

Cash buyers have the advantage over buyers financing their purchase in that they can close very quickly, often in as little as three to five days from date of contract, their offers do not carry appraisal contingencies, and risk of financing falling out is eliminated. For this reason, cash buyers have the upper hand in a multiple offer scenario. Cash buyers also pay lower closing costs and have more flexibility on offer price.