How does one put a cash down payment on a house without leaving a paper trail?

Question

How does one put a cash down payment on a house without leaving a paper trail?

Answer 1

You cannot. Whenever you are purchasing a house everything is documented. If you place a large enough cash deposit, the lending agency is even required to contact the governent who will check to ensure that the fund aren't stolen, or drug related, or owned by a terrorist, etc.

Answer 2

Give Chris 10 pts, he said it

Answer 3

Don't pay any earnest money.  Then pay cash at closing.  You can pay an owner directly and skip escrow by just having someone notarize the deed when the seller hands it to you.  Only do this if you think the person really owns the house.

Answer 4

real estate transactions require paper.  There's no avoidance.

Answer 5

Very simple - do what is known as an invisible assumption.

This is when you buy a property with the seller's financing intact - however, you do not "assume" the loan (meaning you do not go through the whole rigamarole of qualifying for the loan, and you keep it in the original owners name.

Then you give the owner whatever is remaining in cash between what is owed in the financing and what you two agree as the purchase price.

You have a title company get you to put the deed in your name.

Finally, you get a limited and durable power of attorney from the seller so that you can service the mortgage as necessary to keep it current.

This is called a "wraparound mortgage" or "buying subject to". The only "paper trail" is the contract to purchase the property, the limited and durable power of attorney, and the new deed to the property.

Of course, if the bank discovers that the deed has switched hands - they can always enact the due on sale clause that is in most mortgage contracts. HOWEVER, the reality is most banks could care less right now as long as they are getting paid on time each month.

To keep from flagging the IRS, make sure the cash transaction is less than $10,000. You are not hiding anything, just delaying. Because when you end up refinancing the property, or selling it - you will end up reporting the amounts to the IRS in the transaction anyways.

Answer 6

Do not mess with the irs

Answer 7

The lender requires that you source all funds. But, it is not the lender's choice.  It is the federal law.   This is to avoid use money obtain through illegal activity.  It is also to prevent attempts to hide money from division of assets, such as in a divorce. The IRS follows cash transactions, and all payments over a certain amount must be reported.