Foreign National Cash Buyers Need To Be Cautious

Foreign National Cash Buyers Need To Be Cautious.

 

For home buyers and sellers, a cash transaction has and will always be the best deal for both parties. Seller’s love a cash transaction because they know that there won’t be and difficulty in obtaining financing on a home. Buyers love a cash transaction because they usually get better terms from the seller and the closing costs are much cheaper. With all this good news what could possibly go wrong??? Plenty…..

 

Buyers need to be aware that just because they have a bank account with available funds to close on a property that there could be a big problem transferring those funds. With our current Banking crisis, many banks are finding it difficult if not impossible to meet their depositors withdrawal needs. Major Banks as well as local banks have found themselves struggling to keep up with the huge run on funds. Some banks have frozen assets in order to stabilize their accounts while others simply can’t meet the needs of their current depositors.

 

Here in the U.S. the federal government insures depositors on all bank accounts up to $100,000 and just recently increased this amount to $250,000. Foreign Banks may not have similar protections and when depositors go to withdraw funds they may find themselves unable to do so.

I recently had such a situation where the Bank was unable to transfer funds for a closing on a property here in Orlando because the bank did not have the funds to transfer. The closing had to be delayed a week until the funds could be secured. The Buyer could not have predicted this and was quite surprised and upset that they could not get their money.

 

Until this financial crisis settles down and banks get back on their feet, I would suggest that Buyers do a little more digging into their bank accounts before they make any major purchase.  Check with your bank to see if there are any limitations on withdrawals or the amount that can be withdrawn. Buyers may also want to see if their funds are insured and for how much. It might also be necessary to transfer fund early and place them in escrow for safety. Whatever action is taken, Buyers will want to communicate with their bank in advance to assure that your funds are safe and that you have available access to them. Cash will always be a great way to purchase properties; buyers just need to make sure that they have full access to their money.