My company, GenoPetro.House, is a boutique residential and commercial real estate brokerage (and MLS search engine) located in the South Loop neighborhood of Chicago. A licensed Realtor | Leasing Agent since 1998, I've negotiated over $180,000,000 in buy and list side transactions, leases, and personal purchases/sales. I'm also a national contributor of organic real estate content to several industry blogs and websites including:
* GenoPetro.House Weblog
* Houses.com Blog
* Top Ten Real Estate Deals Chicago
* Chicago Real Estate.House (Facebook Business Page)
Read below for a bit more 'About' me...(re-printed from BloodhoundBlog & GenoPetro.House Weblog Archives):
Ex Post Facto
'I purposely did not go to law school because I purposely did not want to become a lawyer.' I say this a lot to people, usually when they ask me if I’m an attorney, which is more often than you might think. I actually had to mutter those very words last Sunday but I’ll address that particular exchange in a moment.
Don’t be misled by the mug shot in the sidebar. Beneath the shiny head and behind the shades (a vacation shot in Cannes btw, and not my everyday accoutre) exists a living, if not waning, example of the state college system of Pennsylvania; Slippery Rock State College to be precise. And I can safely go on record to state (since most of the subjects have probably passed on by now) that some of the very brightest alcoholic, if not academic, professorial minds were tenured there during my own concurrent, seven year run; Over 60% of our department’s predominantly male faculty had Ivy League credentials, most of whoms' wives could drink the average shore leave sailor under the table. And much like a sanctimonious nonsmoker exiting a smoke filled room, the residual, if not secondary animus, still lingers in my persona–even decades hence. That, and a knee jerk tendency to counter-respond with a verbal quip when the right moment calls for it.
That era, if you recall, was a big, political, mid-1970s mess and the fact that Nixon was out, the Vietnam War had just ended, and the GI Bill was in full swing, only deepened the already exisitng social chasm on campus. Having not been in the military myself I had never, up to that point in time, even imagined what it might take (mentally) to annihilate an entire village, (which sadly wasn’t the case with a few of the gentlemen I shared a house with) much less be awarded an all expense paid, four year educational ride, with a VA housing rider to boot. (This however, was the case with everyone in the joint but me.)
And by the way, that is how my veteran housemates all referred to our ramshackle residence; ‘The Joint.’ One frat boy’s Animal House is but another Viet Vet’s joint and we proved as much by renting the basement out to the TKEs for a barrel of beer a month until the town eventually condemned the joint and padlocked the front door for good. Funny, I do remember that but I can’t remember how I ended up in the joint in the first place.
One man’s law school is another man’s life experience, or so I learned whilst cohabitating with the most argumentative living being intelligent design, natural selection, or God ever had a hand in creating; the returning guerilla war veteran on the GI Bill. What I witnessed during those many months in the joint (again, not prison) was how to mirror, mimic, and spin a disputant with the deftness and grace of a shadow boxer or at the very least, rant on like a half drunken political science professor. At the very most, a village stood to be annihilated. The Fair Housing ‘tester’ who dropped into my open house found out as much this past weekend. But again, on to that in a minute…
If my memory serves me well, there is always that one cutoff point each semester, a zero sum date in early October when one has to decide: “Am I in, do I switch, or am I out?” Stay in, and be committed for the duration; Switch, and play catch up; Drop out, and never return. Over a period of two years almost every veteran in the joint chose option three, squandering whatever they could salvage from the Montgomery Plan until, one by one, the government pulled their respective plugs. Of course, this was Slippery Rock in the 1970s. It’s probably safe to assume that the attrition rates at say, Stanford or Cornell were markedly better.
I soon after tucked away my ad hoc education in oral bickering, left a bottle of bourbon on the counter of the joint, and slipped off into the night for safer, if not higher, ground. At one point I decided that if I ever did go on to become a paid mouthpiece, I’d be lucky if I ended up like Nicholson’s George Hanson character in Easy Rider–a legal loser if there ever was one. All this, and a hundred more fragmented thoughts, raced through my mind as I turned to the woman with a clip board standing before me in the living room last Sunday…
“Please fill this out,” I asked politely, as I always do, handing her the preprinted registration card and pen. She ignored my request and brushed by me into the kitchen. Legally, I have a right to know who’s walking through my open house but no need to go there just yet, I thought, forcing a smile instead.
“It is really for the benefit of your agent…” I began.
“I have no agent and I am not giving any personal information,” she said, cutting me off.
Mirroring instinct immediately kicks in. Meet action with an equal reaction. Raise my voice. Kick her out. Get on a soap box. Recite a speech. Nuke her til she glows. Shoot her in the dark. Do nothing. Let it pass…
“It’s a procuring cause issue, but that’s fine with me,” I finally jab back, tossing the card back on the table. "You know...legal stuff."
The room was silent for a few minutes as she scribbled mundane specifics of the kitchen area onto her clipboard; maple cabinets, no recessed lighting, garbage disposal… As much as she attempted the sham, it was clear to me that this intruder was no consumer.
“I have several questions,” she said finally. I just looked at her waiting to make eye contact. I motioned her to continue.
“Who all lives in this building?”
Let me stop here for a second and interject that this particular listing is part of an urban renewal project that was built six years ago on what was formerly known as the Cabrini Green Housing Project. The replacement housing regulations require that 1/3 of these newer units be made available to displaced Cabrini residents; 1/3 to moderate income city workers; and 1/3 to the fair market. The unit I’m trying to sell lies in the third category.
“I can’t accurately answer that question,” I say. “I’m not selling the buliding. I’m only selling this unit.” And since I’ve worked most of my career in and around this particular area, I’ve had this conversation before.
“Any couples? Any children? Any seniors?” She went on, going down her list and ignoring my tone.
“Like I said, I only represent the owner of this unit. Submit a contract and you can meet him yourself at the closing table.” That struck a nerve and she shot a dart my way, deflecting lightly off my full metal jacket. I decided to end, at least, my half of the conversation soon before things got ugly.
“Any problems with the building?” she proded on.
“Problems?”
“Problems with the building is the question. Lawsuits, legal problems with the neighbors, specifically…” she continued.
“That’s a Fair Housing question that I can’t answer. Your attorney can request a 22.1 Disclosure Questionaire to be filled out by the association when and if you submit an offer. They charge $50 for that, I think. The rest of the property specs are posted on our website. We don’t charge anything…if you register; which of course, you won’t…”
“So there are or are not any pending lawsuits?” She reposed, trying her best to stick to her script while at the same time sensing our time together was quickly winding down..
“Not that I’m aware of. It would probably be in the minutes of the last board meeting or maybe the Association itself should address that issue, if it is an issue, but like I said, that’s a question for the lawyers to discuss. And I believe it’s $50.”
“Why…?” I thought she’d never ask, “Aren’t you a lawyer?” Okay, perhaps I baited her. Maybe it’s because I know what it takes to raze a village. Perhaps it was the old trick knee from those long gone college days, jerking on instinct … or maybe it’s just because I enjoy saying the words…
“No, I’m a Realtor,” as I gently guided her back towards the door. ” I purposely did not go to law school because I purposely did not want to be a lawyer. Goodbye.”
Or something along those lines.
Geno Petro | CHICAGO REALTOR®
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Romancing The Deal
I'm in the middle of a deal right now that is a little reminiscent of a plot line from Romancing the Stone---peril lurks around every corner and a single false step will insure either one of those big rocks rolling my way in a catacomb, or me getting yelled at by someone, for sure. At the very least, there's a feeling of impending doom and I'm being portrayed as ill intentioned Ralph, the Danny Devito character who's only in it for the money. "You know, I bet you can buy a great townhouse down here...for around five or six dollars," says poor Ralph in mock sincerity, as his Sufi Arab captors drag him across the desert floor and into the darkness...
Actually the deal I'm referring to is already negotiated, out of Attorney Review and clear to Close--sort of. The 'deal' itself is cool...for the most part--only the final appraisal lingers in the wings. The actual condominium that is attached to the deal is what has a Curse on it. You see, it's New Construction. It has the notorious New Construction Curse wherein everything surrounding the transaction begins on a flat note back at Day One, continues off key, pitchy and not quite in tune through all the syncopated stages of completion, until the last and final hour when the heaviest lady at Chicago Title sings Goodnight Irene at the settlement table and everyone is free to pile into the elevator and exit the building in silence, all feeling that they somehow got gypped out of the real treasure along the way.
Even good news seems like bad news when the New Construction Curse has been cast:
Agent: "Good news, folks. The cabinets have arrived. "
Buyers: "Where were they?"
Agent: "I don't know. On the truck? Stuck at the Canadian border? Held up in Customs?" Doesn't matter. They're here now."
Buyers: "Ten years later."
Agent: "Weeks. Ten weeks later"
Buyers: "Seems like years. What color were they again? I think we might want to go with a differrent finish. How hard is that to change?"
Ralph stands at the very edge of the 900 foot craggy cliff contemplating the pros and cons of taking just one more baby step....
At this point he is only in it for the money, it would seem. And while most two-party deals move along as smooth as silk and without high adventure; like carrots and peas or Forrest and Jenny, such is not the case with those deals which are cursed. It usually starts out with a simple email exchange:
> Dear Ralph,
I found your website on Google. May be relocating to Chicago. Please enroll me in your Dream Locator. I want the world and I want it cheap.
Jack T. Colton, Mercenary at Large
> Dear Jack,
Not a prob. The world's sucking major wind these days. It's a world buyer's market. Come on down.
Ralph
> Ralph,
Roger that. I'll be in town on Saturday. Rock on.
Jack
Then the house-hunting trip is scheduled, conducted and consummated. Fifteen condominiums are visited in a single weekend and a decision is made within 48 hours:
"I'll take the one by the lake that is almost ready. Tell them to upgrade the cabinets, beef up the lighting allowance and be ready to close in 60 days. I want the preferred parking space, steam showers in all bathrooms and California Closets throughout the unit. Heat the floors, paint it all blue, and pay half my Closing Costs at settlement. Tell them if they do all that, we got a deal..."
I do as I'm instructed and get them to agree. What else can they do? It's a world buyer's market and there's no shortage of world right now, not in Chicago anyway. They always agree to what they can't deliver. That's what 'they' do best. And 'they' know who I'm talking about, too.
It's my belief that such a 'Curse' often begins during the negotiation with unreasonable expectations. Not always, but often. Anyway, here's how the afore-mentioned scenario has played out for me and my client up until this point in time:
January 25-26: Viewed 15 different properties; some resale, some new, some proposed.
January 27: Submitted an offer on a Model unit in a New Construction project in near move-in condition.
January 28: Negotiated details with the Listing Agent and Builder and reached a verbal agreement with only minor changes.
January 29: Another higher offer comes in and is accepted and signed by the Builder. We get bumped out of the Model deal but are offered a 'yet to be built out' unit on the same terms, one floor above.
January 30: We accept the deal on the the condition of a 60 day completion and a close of escrow on April 1st. They agree.
January 31-March 6: My iPhone barely rings. Nothing significant transpires except: Cabinets are delayed. Original lighting is no longer in stock. The wrong color granite is ordered. Paint color is three shades off. Closets are on back order.
March 7: Chicago City Council votes overwhelmingly to increase the Property Tax Stamp on home sales by 40% and passes it on the the Buyer effective April 1st.
March 8: We ask to move up the Closing date one day to March 31st but the Builder is reluctant to do so.
March 9-16: New selections are chosen and things move along at a snail's pace.
March 17: City Council reverses its decision and votes overwhelmingly to pass the 40% Tax Stamp hike onto the Seller instead, effective April 1st.
March 20: The Builder immediately agrees to complete and close by March 31st and all hell suddenly breaks loose. My iPhone rings and pings every few hours, 24/7 for the next 3 days; Builder, Lisiting Agent, Appraiser, Cabinet Guy, Loan Officer, Underwriter, Appraiser, Listing Agent, Buyer, Appraiser, Listing Agent....did I mention the Appraiser?
March 21: Here I sit, frustrated and contemplating walking the earth like Caine in Kung Fu except no Shaolin Monk, am I. In fact, staying in any place with less than a 3 star rating is a little distasteful to me not to mention my martial arts are a little rusty to be hitting the road barefoot, at age 51. The iPhone is ringing and pinging even as we speak. I pause and listen to the voice mails and then read the multiple texts email messages. I have no more answers for this day. I fly out of town at 5:30AM tomorrow morning for a weekend with family and loved ones. What can I say? It's not my only deal. There are also a half dozen other Listings with my name attached that need an equal amount of attention. And again as many Buyers in the car as well. Everybody has questions. I scramble for the correct answers. I let the Sufis have their way with me...
The Curse will be there when I return; of this I'm certain. I also imagine most of my Listings aren't going anywhere between now and Monday either. And just as sure as Michael Douglas, aka Jack T. Colton, gets Kathleen Turner in the final scene and poor, pithy Ralph gets his just desserts in the desert, we will all live to star in another sequel and grapple with another 'Curse' or two before it's lights out for everybody.....Jewel of the Nile, or otherwise. And not to mix movie metaphors but 'That's all I have to say about that..."
Geno Petro | CHICAGO REALTOR®
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The $800,000 Crier
I posted an essay early on in my blogging experience entitled The $800,000 House. Six months later, after discovering I could actually have a little fun with this medium and that people were actually tuning in to my site on a daily basis, I wrote another post called 'The $4,000 House (see next article below). I even used a similar funny picture of a shack with good old location (Real Estate Fodder 101) and literary flashback (English For Amateurs 103) being common threads between the two. At the end of the year I was a little disappointed, but not at all surprised, when the Pulitzer committee didn't include me on their long list of nominees for my volume of tongue-in-cheekiness. Come to find out, more would eventually be revealed...
And now, several more months hence, and fresh off a whirlwind tour of buy-side advocacy (driving internet clients around in my car and showing property every day for the past two weeks), I am finally able to kick back, relax at my writing desk, and fire off the third and final part of a real estate trilogy I envisioned 18 months ago when this whole real estate blogging thing began to make sense to me. My spellchecker is dusted off and the dog is at my feet. I'm wearing my LA Dodgers cap on backwards and my coffee cup is within reach. My iPhone is on 'Airplane Mode.' Now, if I can just get my Right Brain to cooperate...
The $800,000 Buyers; Where Have They Gone? ......Wait....I'm stalling. Allow me to digress for a few paragraphs as a brief, temporal decompression seems to be in order.
You see, I can't write and sell at the same time. Apparently every other notable real estate blogger I read can. Ardell can. The likes of Greg Swann and Russell Shaw certainly can. But I can't. I'm right-brained and left footed when it comes to combining these two (to me)incongruous activities. In other words, I have to sell real estate to support my lifestyle but what I'd really yearn to do on a daily basis is sit at my computer and listen to the radio. When I try to do both (selling and writing, that is), I end up doing neither worth a darn. I disappear for days at a time, like Ray Milland in that horrible movie except no one tries to save me from myself.
I wandered off in a bohemian direction early in life and straddled either side of that path until the fear of financial insecurity woke me up in a cold sweat one night and partially paralyzed my artistic future forever. I was 27 with a 5 year old daughter, a wife who would eventually be ex-filed, and a 15 year old Buick Riviera with a bad muffler, empty gas tank and expired registration. Hello???...Meta-phor...duh!
Five years later I made $100,000 for the first time in a 12 month period. Everything in my closet either had a Brooks Brothers tag attached to the lining or a white guy on a horse playing Polo. My wingtips all had wooden shoe trees tucked neatly inside. My rep ties were silk and of the proper width and belt buckle length. I leased my first BMW, bought a car phone the size of a toaster oven, and began buying houses instead of renting apartments. If it wasn't motivational, I didn't read it and if it didn't pay a decent commission, I didn't sign it. I was soon made manager of my peers and became loved and hated at the same time by everyone within shouting distance of my second from the corner office. "Put that coffee down...coffee is for..."
The only thing I actually wrote, that required any creativity at all (besides life insurance policies and expense reports), in that entire period was one well thought out letter to the editors of Fortune Magazine, which they in turn, published. It was about 'Salesmanship' and how I fancied myself a modern day Horatio Alger. For one week, in national print, I was almost famous. Someone even commented on my letter and I was re-quoted again the following week. Ten minutes after that I was forgotten forever, back in the car with my sales trainees, chasing my Left Brain through the uninsured streets of Baltimore and into the abyss of...
Where have the $800,000 house buyers gone? I think they haven't gone anywhere. I think they are safe at home in their $400,000 condominiums nesting and spooning with each other and coveting whatever precious equity they've accrued over the past 4 or 5 years, afraid to part with either lest they awake cold and sweaty in the middle of a sub-prime Riviera night; bad muffler, empty gas tank, and everything else that goes along with that particular nightmare.
Eighteen months ago it was hard to find an $800,000 house in Chicago that wasn't a tear down. Today, it's hard to find a serious $800,000 buyer... period. My clients these days seem to hover consistently (and significantly) above or below that oddly even price point but not in its wheelhouse, per se.
My wife and I are the only people I know of who actually un-spooned long enough to put our own nest on the market, march boldly into the middle of the housing glut, and cherry pick (without contingencies and only St Joe) a single family property we would never have gotten two years ago when it was on the market for $200,000 more. Maybe this is why writing is so tedious for me these days. My brain is pulling me...
I find myself leaning to the left...and in a presidential year, to boot. (Yikes!) What if I never get it right again? Maybe it's because I should be out there trying to sell something instead of drinking coffee at midnight, listening to my fat dog snore, afraid to fall asleep myself, lest I awake in a cold, sweaty...
Geno Petro | CHICAGO REALTOR®
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The $4,000 House
I once had a chance to buy a house for $4,000. That's right, one 'four,' one 'comma,' and three 'zeros. Granted, it was last century (scary thought) and about 35 years ago. The town was Slippery Rock, Pennsylvania and was is also home to my alma mater. Yes, I somehow managed to accumulate a couple hundred hours of college credits and a degree or two from Slippery Rock State College and yes again, such an oddly-named place does in fact, exist. And finally, in summary of this seemingly unending paragraph down Long Term Memory Lane (or what's left of it from that era), it's probably the main reason you are reading this article here and not in The New Yorker, Atlantic Monthly or any of the assorted 'top shelf ' publications that barely allow writers like me (with degrees from such places) a subscription on credit much less a by-line in the actual magazine.
The rent was $80 a month, the landlord, Charlie---a fall-down, snowstorm drunk of Bukowskian proportions, and the setting...well lest I digress too deeply, it was a rock quarry college town in the late 1970's--early 80's fog of my graduate school years. Three miles or so outside of this Western Pennsylvania burgh of mid-to-higher education rested a two-lane stone and concrete bridge and a hundred yards or so below that was nestled, along a rocky and muddy winding descent of rutted roadway, a delapidated park-like community of 1930's circa resort cottages and rusting trailer homes on the banks of the Slippery Rock Creek. Once home to a grand summer pavilion with a painted pony carousel (on display at the Smithsonian for many years in its later life), roller rink, and Olympic sized pool with exhibition style diving platforms, Rock Falls, as it was aptly named, had long since lost its appeal for summer resort vactioners and was all but left for the squatters.
Twenty years past it's heyday, The Falls was now 'home' to a year-round but transient collection of 1960's leftovers; Liberal Arts graduate students, admonished or expelled college professors, twenty or so wandering black dogs from the same lineal extraction, and a bearded and pony-tailed platoon of Vietnam Veterans grazing on the GI Bill. Throw a handful of tattoo-branded 'Old Ladies' (biker chicks whose 'Old Men' were either on the lam or in the 'joint' with no actual motorcycles anywhere to be found), the occasional even smaller town runaway, and garden variety of trailer park drunks-- throw them all into the mix and you have before you, the above mentioned neighborhood of the $4,000 house I once had the chance to buy.
My National Direct Student Loan for $4,500 had just arrived in the Financial Aid Office when the idea was first proposed to me by Charlie B. (He kept his AA designation although he had long since drifted from the pack, as it were). I was the only person with 'real money' in a two mile radius. The check, intended for living expenses, was earmarked to get me through my last semester of graduate school. Charlie B. had a better plan in mind.
He owned two cottages outright and grossed $240 a month in rents from his waterlogged purple corner of the Butler County Monopoly Board. I paid $80, my housemate paid $80, Charlie's housemate paid $80 and Charlie himself, lived for free. We as tenants, were permitted to keep any 'sublet rents' i.e. sofa sleepers ($40 a month), sleeping bags on the living room floor ($30 a month), and outside hammock sleepers ($15 a month in fair climate months). We were also to supply all alcoholic beverages for both houses and Heaven forbid, we ever ran low or actual God forbid, out. And thinking back, the houses themselves were barely habitable with no perc, dried-up water wells and overflowing septic tanks. We showered (most of us anyway) on campus in the Field House. Still, the rent was cheap and the property 'cash flowed' if paid off in full. My first student loan re-payment wouldn't be due for at least 18 months, he reminded me. My landlord might have been a lush but he could count other people's money with the best of them.
Charlie had been on 30 day roar when he came busting into my bedroom with his property deed in one hand and a bottle of Yukon Jack in the other. Again…Bukowskian proportions, I kid you not. He had done the math. With future rents and 'sublets,' I'd recoup my investment in less than three years while living free and clear myself. When I asked about fire insurance he thought for a second then replied, "You don't pay anything for that. No one will insure down here anyway so you make money there, too. You see...maintenance free..."
Maintenance free. $4,000. Renters. Sub-lettors. Oh, and $500 left over..."for liquor," he suggested. "We'll throw a shindig." He did a little jig jabbing the folded document about my head and thin air like a drunken shadow boxer. I felt like I was being pressured into signing over my last educational stipend. We drank from the bottle. And the pressure was soon on an equal plane with any time share pitch I've experienced since. Even the Mexican cab driver who shanghaied my wife and me to the Mayan Palace in Cabo had nothing on Charlie B. with a snortful of Yukon. I finally agreed, in principle, to think about it while he slept off his bender. Three days later he was back.
"I bought a car instead," I told him. "A 1972 Buick Riviera." This was 1981 so needless to say, it was a junker and perfect for the daily trip up and down the rutted road out of The Falls to get to town and back. I later figured each trip took $10 of value off my vehicle and in a matter of months I would have probably done better with the house deal but such is life and its lessons learned.
I gave him a case of Guiness Stout to make peace and an envelope with $200--two months rent plus my end of the 'sublet' for the current month. He looked like he was going to cry, then hit me, then hug me, then he left and never brought it up again. Honestly, I think he forgot the whole conversation and was just pleased with the booze and by the end of the semester I was gone forever anyway, never to return...
Except twice. Once, fifteen years later I decided to drop by The Falls to see who might still be around. Charlie was long gone, too and my BMW, up to its wheel-wells in mud and rocks, had to be towed out of the park. Great, great, great grand descendants of black dogs circled me like a trapped animal, almost sensing I was out of place there with my Fortune 100 job and failed German technology. The house was still standing. A squatter from the next door cottage told me he heard that 'Charlie B.', a rural legend by now, lost both places in a poker game when he was drunk. Not sure how much faith I put in squatters but it made sense to me. Bukowski himself hadn't done much better if you think about it. And if you don't know who he is then you've read and drank way too little in your lifetime. Think Mickey Rourke in Barfly.
Five years later, passing through that part of the state on a business trip, I took the exit ramp off I-79 north on a whim, and returned once more--this time in an SUV. Dogs were there. House was gone. Burnt to the ground (not for the insurance, to be sure). I did the math. Even without the 'sublet' dough, over the years it would have probably been an okay 'buy and hold' seeing that soon after, I abandoned the Riviera on a Pittsburgh bridge when the front left wheel fell off. The $10 depreciation schedule had finally taken its final toll and expired in the middle of rush hour traffic. And while Charlie B. may not have been much of a landlord or an actuary, or even a poker player, he was a pretty damn hard closer and if nothing else, had found a way to collect rent and drink for free.
Geno Petro | CHICAGO REALTOR®
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What A 'Cash' Real Estate Deal Really Is (...and isn't)
Let me begin by saying what a 'cash' real estate deal is not. With rare exception, it is not a shopping bag stuffed with twenties and C-notes plopped down in the middle of a title company closing table next to the HUD statements, complimentary pens, and customary jar of breath mints (although I did once find myself staring, in awe, at a gym bag full of stacked and banded currency in the lap of a potential foreclosure buyer--but I'll save that for another post on another day).
Also, a 'cash' deal is not always a wired money transfer to the title company on closing day, nor is it necessarily a certified bank check brought by the purchaser for the full purchase amount. Of course, both of these examples are fairly common occurrences when the buyer has already sold and closed on a previous property; or, a corporate relocation company is involved in the deal via an agreed buy-out scenario; or, the purchaser is just plain rich.
The type of 'cash' deal I'm referring to is something more commonly used as a Real Estate 101 negotiation tactic, particularly in a multiple offer situation. Simply put, it is a waiver (and absence) of any 'mortgage contingency' attached to the initial contract. Such a waiver usually does not prohibit a buyer from getting some form of financing--the deal just can't be dependent on it. In other words, the buyer is declaring his/her liquidity for the offered amount, or is absolutely certain in their ability to obtain a real estate loan outside the legal wording of the deal (usually backed by a large bank account, portfolio of paid-off properties, etc). A verified Proof of Funds letter should be required in any case.
And while such 'cash' deal offers (mortgage contingencies waived) may appear to be stronger than offers merely accompanied by a glowing 'pre-approval' letter on watermarked stationery, the seller should not be too quick to jump. I've found, over the years, that most offers with a 30% - 50% down payment (and the balance financed) close escrow with equal or better success than any of the scenarios mentioned above. Deals that begin as 'cash' sometimes 'morph' into 'financed' after initial acceptance, depending on the savvy of the real estate attorneys involved--and usually after the property has already been flagged as 'Pending' in the MLS and tied-up in Attorney/Inspection Review for a week, or two, or three, or.... At this point, many sellers just decide to move forward and work with the deal they already have in hand rather than killing it (not as easy as it sounds), and re-listing.
Bottom line: at the very the end of the real estate day--if the deal successfully closes escrow, the seller walks with 'cash' anyway; be it from a closed loan, certified bank check, money wired from standing assets, a shopping bag of bundled swag, or otherwise. And that, dear readers, you can take to the bank.
Geno Petro | Chicago REALTOR®
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Rave Reviews
