We get it, most people only sell a property a few times in their lifetime. And when you start looking at selling a house you have questions. We get a few questions each week from sellers that in many cases are covered by our Frequently Asked Questions page, sometimes the page does not quite cover all questions. Today we talk about “bringing cash to close.”
This week we got a great question:
You say you pay cash, yet your real estate contract, it says you are not bringing any cash to closing?
How do I know I am going to get paid?
The standard contract has a section that talks about the purchase price, how much money is coming from loans, and then how much money is coming from cash.
It might look like this:
- Purchase Price: $100,000
- Money from Loan Funds: $100,000
- Cash Needed to Close: $0
Or it might look like this:
- Purchase Price: $100,000
- Money from Loan Funds: $75,000
- Cash Needed to Close: $25,000
But keep in mind we are not meeting you at your house with a bag of money, instead, we are writing a purchase contract and sending it to a title company. The contract itself is what we agree to and it tells the title company what we have agreed to. So in this section where it talks about cash to close, it tells the title company that the purchase price is so much, the money coming from loan funds is so much, and the remainder that needs to be paid by the seller in cash.
Keep in mind the title company does not deal in any cash. The loan funds and the cash to close is going to be wired into the title company.
The Title company is going to collect all funds coming in from all sources from the buyer. They are also going to look at the title of the property and see what the seller might own in taxes, mortgages, liens, and judgments. They are going to then make sure anything that needs to be paid on behalf of the seller gets paid. They are going to make sure all the right paperwork gets completed. Then once everything is done correctly, they are going to pay the seller, probably in a wire or a check, and then deed the property to the seller and give them the key.
More on what title companies do:
- From Zillow: “What do Title Companies Do?“
- From HomeLight: “What does the Title Company Have to do with your Home Sale?“
- From RocketMortgage: “What do Title Companies Do?“
