It's illegal to have large amounts of cash?

[Headless Thompson Gunner]

in the last 36 months we've done over 2 mill in real estate deals cash. we prefer to meet folks at their bank if we can so they can feel safer and for our protection as well.

If you're going to meet at a bank to make the transaction, why use cash?  It wouldn't exactly be inconvenient to do a wire or transfer or a cahsier's check if you're already standing in the bank.

[The Rabbi]

Nor is he driving across country to do it.

[Paddy]

in the last 36 months we've done over 2 mill in real estate deals cash. we prefer to meet folks at their bank if we can so they can feel safer and for our protection as well.

What kind of real estate?  Who are the buyers and who are the sellers?  Why do they want to deal in cash?

[Ned Hamford]

in the last 36 months we've done over 2 mill in real estate deals cash. we prefer to meet folks at their bank if we can so they can feel safer and for our protection as well.

What kind of real estate?  Who are the buyers and who are the sellers?  Why do they want to deal in cash?

It actually saves a ton of paperwork, something to the tune of 300 distinct pages.  Cash deals don't have nearly the same amount of oversight.  Building reports don't need to be made.  Some trick to the law where fewer checks and whatnot for cash transfers.  One reasons why its frowned on.  See alot of it in fraud cases with real estate flipping. 

But of course the guy wearing a trenchcoat in the middle of the summer may not be a shoplifter.  Store does feel better asking him for his reciept tho 

[cassandra and sara's daddy]

i buy up properties directly from folks  i hunt it down and talk to them sans agents. i see a piece of property that looks good i look up owners at courthouse contact em  negotiate. you would be amazed how the sight of green cash makes em willing to sell.many times they are older folks.  i do this to sidestep the land sharks in the way.  good example was a prperty on corner of rt 301  contacted the lawyer representing old women who inherited the land he said not interested in sale  i got to her directly and low and behold she was interested  lawyer had never told her my offer  just said it wasn't enough.  did i mention the lawyer speculates in land? has history of buying parcels from clients estates? through a patrnership  of course. i try to do deal with these folks in bank with their banker so we can notaize papers and they can get their money in a place where they feel safe.cash also lets em make cash gifts to kids etc. there is a lotta legwork involved and plenty of dry wells but great profits if you are persistent

[Paddy]

Sorry, cassandrasdaddy, I'm not buying it.  There are both federal and state reporting requirements on these kinds of transactions.  And if you're acting as someone's agent, there are also licensing and compliance requirements.  Unless you're in flagrant violation of these laws, I simply don't believe you. 

[cassandra and sara's daddy]

sure they report it    banks do it on everything over 10 k  everything over 3 k at the post office gets a special report form.  we don't try to get around any of that.  in fact one of the side effects of trying to do the deal at their bank is it allays fears we are pulling a fast one. you avoid anyone having to wait for funds to clear as well. its unusual and sometimes the folks at the bank are a lil weirded out but thats their problem.   we on occaison deal with what i call the old coots  they just want the cash and to heck with banks. its a pain but where i live lands gone from 3 k an acre to close to 100 k for building lots in the last 15 years  getting a cheap lot means my house will move when i market it. same house as all the others just cheaper

[The Rabbi]

in the last 36 months we've done over 2 mill in real estate deals cash. we prefer to meet folks at their bank if we can so they can feel safer and for our protection as well.

What kind of real estate?  Who are the buyers and who are the sellers?  Why do they want to deal in cash?

It actually saves a ton of paperwork, something to the tune of 300 distinct pages.  Cash deals don't have nearly the same amount of oversight.  Building reports don't need to be made.  Some trick to the law where fewer checks and whatnot for cash transfers.  One reasons why its frowned on.  See alot of it in fraud cases with real estate flipping. 

This makes no sense to me.  I am not aware of any difference legally between buying a property for cash (actual legal tender) and using a cash equivalent, like cashier's check.  Nor am I aware of any real estate transaction that requires 300 distinct pages.
This would require some explanation and documentation before it is dismissed as nonsense.

[Paddy]

sure they report it    banks do it on everything over 10 k  everything over 3 k at the post office gets a special report form.

There's more to it than that.  There are IRS reporting requirements "Proceeds from Real Estate Transactions", IRS withholding relating to FIRPTA, etc.  Also, how does the buyer know the property has clear title, that there are not liens or encumbrances?

I am not aware of any difference legally between buying a property for cash (actual legal tender) and using a cash equivalent, like cashier's check.

The reporting and recordkeeping requirements are the same. A 'cash equivalent' (cashier's check, etc.,) is referred to as 'cash'.  But cassandrasdaddy is talking about currency, correct?

[The Rabbi]

Yes.  He implies that he (his boss) saves a lot of paperwork by showing up with suitcases full of greenbacks.  I need to be persuaded of that one, as I am not aware of any legal distinction between actual greenbacks and their equivalent in bank draft, etc.  I am also unaware of any real estate transaction (not a mortgage transaction) that requires 300 distinct pages of documents.

[Paddy]

I am also unaware of any real estate transaction (not a mortgage transaction) that requires 300 distinct pages of documents.

California has all sorts of disclosure requirements, even in 'cash equivalent' transactions:
Section I Disclosures Required of a Seller  and/or a Real Estate BROKER/Agent 6

A.   Disclosures Upon Transfer of Residential Property. 6

1.   Termination Right. 6

2.   Real Estate Transfer Disclosure Statement 6

3.   Local Option Real Estate Transfer Disclosure Statement 11

4.   Natural Hazards Disclosure. 12

5.   Mello-Roos Bonds and Taxes. 15

6.   Property Taxes. 15

7.   Ordnance Locations. 15

8.   Window Security Bars. 15

9.   Industrial Uses. 15

10.  Methamphetamine Contamination. 15

B.   Earthquake Guides. 16

C.   Smoke Detector Statement of Compliance. 16

D.   Disclosure Regarding Lead-Based Paint Hazards. 16

E.   Californias Environmental Hazards Pamphlet 17

F.   Delivery of Structural Pest Control Inspection and Certification Reports. 17

G.   Energy Conservation Retrofit and Thermal Insulation Disclosures. 17

H.   Foreign Investment in Real Property Tax Act 18

I.    Notice and Disclosure to Buyer of State Withholding on Disposition of California Real Property. 18

J.    Furnishing Controlling Documents and Financial Statements Concerning Common Interest  Developments (CIDs) 18

K.   Notice Regarding the Advisability of Title Insurance. 19

L.   Certification Regarding Water Heaters Security Against Earthquake. 19

M.  Data Base  Locations of Registered Sex Offenders. 19

Section II Disclosures Required of Real Estate Agents  in the Transfer of Residential Real Property  20

A.   Visual Inspection. 20

B.   Agency Relationship Disclosures. 20

C.   Disclosure of the Negotiability of Real Estate Commissions. 22

D.   No Disclosure Required for Manner/Occurrence of Death; Affliction of Occupant with Aids  22

E.   Disclosure of Sales Price Information

but still, 300 pages seems excessive.

Maybe Brad Johnson will be along.  He'll certainly know about federal reporting requirements. 

[The Rabbi]

But none of those (which seem mostly to be disclosures about property condition) are obviated by paying cash, meaning tender.  If the title to the property transfers then all of those things would still be required.

[Brad Johnson]

Maybe Brad Johnson will be along.  He'll certainly know about federal reporting requirements.

Been watching this one.

In terms of real estate it's pretty simple - most title companies won't accept cash.  Period.  Some will accept a certain small amount for earnest money.  Even then, $1000-1500 is usually the limit.  Above that it's check, money order, or nothing.  The reason is pretty simple, they want a paper trail so they can document every tiny detail.  Plus, they don't want the liability if the cash is being used to launder dirty funds through a real estate transaction - the reason that they stopped accepting cash to begin with.

If you want to use cash for a personal transaction and both parties are willing, more power to you.  Just understand you are creating more problems than you solve.  The first and foremost is drawing that much cash out of the bank.  Unless you constantly deal in that much cash (and very, very few individuals do) it is instantly red-flagged as suspicious activity.  You are now on the government's "keep an eye on" list.  The seller also has a huge issue.  Now they have to do something with a big bag full of cash.  If they go deposit it, they go right on the same government list as you.  If they keep it somewhere it becomes a great big enticement for someone to steal, as well as being a huge liability should there be a fire, disaster, etc.  If you are audited and they find you suddenly stopped spending money out of your checking account, or were regularly putting cash in from an undisclosed and unreported source, prepare for a nice stay at Club Fed (in addition to seizure of pretty much everything you own).

In any case you the bank is required to notify the fed if you broach the $10k limit on withdrawals/deposits.  As far as reporting requirements go on real estate, I really have no idea if you are required to report a large actual-cash transaction as I've never been involved in one and would really prefer not to for liability reasons.

I know a lot of people who get out of all kinds of thing, including taxes, by being all-cash for small stuff like home repairs, handyman items, etc., but I don't know a single person who deals in all-cash for anything more than passing day-to-day expenses or income.  To do so makes you stand out from the crowd and invites scrutiny by all kinds of people and agencies that can make life not so pleasant, even if you are doing everything within the letter of the law.  It's much easier from both personal and business standpoints to go with the flow and stay below the radar.

Cash may be king, but being the odd-man-out makes you a Suspect.

Brad

[mtnbkr]

Is it possible the reason the 100k was in cash rather than a single cashiers check was because they planned to make many smaller purchases?  Land in Western NC isn't all that expensive and I could see someone buying several properties with 100k.  It would be kind of difficult to buy multiple properties from multiple owners with a single cashiers check.

Chris

[Tallpine]

One good reason to carry $100K in cash is when you are going to the gas station to full up your SUV

[cassandra and sara's daddy]

where we play there are many lil pieces of land you can get cheap for cash  had one drop in our lap last year  2 buildable lots for 1 k each  and he came to us and named the price.  he thought since they didn't perc for him 20 years ago that he was putting one over on us.  he didn't know about the new systems.
you can get smaller parcels for 10 k sometimes a lil more or a lil less in the country
  slap a modular on em and you can do quite well.  once word gets out you don't have to look for them  they come to you

[Ned Hamford]

But none of those (which seem mostly to be disclosures about property condition) are obviated by paying cash, meaning tender.  If the title to the property transfers then all of those things would still be required.

I can only speak of my own experiance and city, and best mention I'm not in the field.  Cash transfers (non mortgage) in NYC don't require a HUD report.  I've never counted pages, but if I ever dropped it and had to re order the pages, I think I'd cry.