How Do You Know a Long Island Cash Buyer Actually Has the Money?

A homeowner in Massapequa asked us a question last spring that more sellers should ask out loud: “You keep saying cash. How do I know you actually have it?”

It is the right question, and almost nobody answers it. The word “cash” does an enormous amount of work in this business and gets explained hardly at all. Plenty of outfits advertise cash for houses on Long Island without ever showing a seller where that money physically is. Whether you end up working with us or with other trusted New York cash buyers, you are entitled to see the funds before you hand over your house.

So this post does not walk you through “the process.” It follows the money instead. Your sale money sits in four different accounts on its way from a buyer’s balance sheet to your own bank account, and at every one of those four stops there is something you can check yourself, for free, before you are committed. Long Island here means Nassau and Suffolk counties — roughly 2.92 million people between them at the 2020 census, 1,395,774 in Nassau County and 1,525,920 in Suffolk County — with Queens sitting immediately off Nassau’s western border and Suffolk running east to the forks.

Get Your Free Cash Offer Now!

Fill out this form to get your no-obligation all cash offer started!

What does a company actually mean when it offers cash for houses on Long Island?

It means the purchase does not depend on a bank saying yes. That is the whole of it. “Cash” is not a suitcase of bills and it does not mean the buyer keeps your sale price in a checking account gathering dust. It means the money is already committed and under the buyer’s control, so no lender’s underwriter, appraiser or committee gets a vote on whether your closing happens.

That matters because of what it removes. A financed buyer’s contract carries a mortgage contingency — a clause letting them walk, deposit intact, if the loan falls through. A real cash contract has no such clause: nothing about the buyer’s financing can kill your deal, because there is no financing.

Stop one: whose bank account is the money sitting in right now?

Before you sign anything, ask for a proof of funds letter and read the name on it. A proof of funds letter is a short statement from a bank, a credit union or a fund administrator confirming that a named party controls at least a stated amount of money as of a stated date. It takes a legitimate buyer about a day to produce one.

What should a proof of funds letter actually show?

Four things: a real financial institution’s name, the buyer’s legal entity name, a figure at or above your purchase price, and a date inside the last thirty days. The entity name is the part sellers skip. If the contract will be signed by “Island Shore Holdings LLC” but the letter is in some individual’s personal name, those are two different parties and you have proof of nothing. Ask for the letter to match the contract.

What does a weak proof of funds letter look like?

Undated, unsigned, no institution, or a “pre-approval” instead. A pre-approval letter is the opposite of proof of funds — it is a lender indicating willingness to lend, which is exactly the dependency cash is supposed to eliminate. Also be wary of a letter that states a figure far above the offer with no account detail at all; it costs nothing to type a large number. And if a buyer treats the request as an insult, you have learned something useful at no cost. Serious cash home buyers on Long Island expect to be asked and have the letter ready.

Stop two: where does your deposit go after you sign the contract?

Into a lawyer’s escrow account — not the buyer’s account, and not a drawer at the buyer’s office. New York practice puts an attorney on both sides of a house sale, and the contract deposit goes into the escrow account the attorney maintains for client funds, commonly an IOLA account under Judiciary Law § 497. General Business Law § 778-a requires an escrow agent to hold a buyer’s down payment in a dedicated account and not mix it with their own money.

The practical meaning for you: once that deposit lands in escrow, neither you nor the buyer can touch it. It is released at closing or per the contract’s terms, and a lawyer who releases it early is risking their licence. So the question to ask at signing is simply which attorney is holding the deposit and in what account. A buyer who wants to hold your deposit themselves is asking you to carry a risk nobody on Long Island carries. Walk.

Stop three: why is there no appraisal, and does that actually help you?

There is no appraisal because an appraisal is a lender’s protection, not yours — and its absence helps you on timing but removes an outside opinion of value. Be honest with yourself about both halves of that.

The help is real. An appraisal is one of the slowest and least predictable steps in a financed sale: scheduling, the report, and then the possibility that it comes in under contract price and the bank refuses to lend the gap. Thousands of Long Island deals die exactly there, usually on older houses where no clean comparable sale exists — a 1950s Levittown cape that has been added onto twice, a waterfront place in Amityville with flood history, a two-family in Hempstead with a non-conforming layout. Remove the lender and you remove that whole failure mode, which is a large part of why a cash offer process closes in weeks rather than months.

The cost is also real, and you should hear it plainly. With no appraisal, nobody independent is telling you what your house is worth — you are taking the buyer’s number. The fix is cheap: pay a local appraiser a few hundred dollars for an opinion of value you control. If the two numbers are close, you bought certainty cheaply. If they are far apart, you just saved yourself a great deal.

Stop four: how does the money actually reach your account on closing day?

By wire or certified funds disbursed from the closing attorney’s escrow account, after the deed is signed. At the closing table the buyer’s funds are already with the attorneys. You sign the deed, the payoffs and liens come off the top, the transfer taxes are paid, and the balance is wired to you or handed over as a certified check. The deed itself then goes to the county to be recorded — at the Nassau County Clerk’s office at 240 Old Country Road in Mineola, or the Suffolk County Clerk at 310 Center Drive in Riverhead.

One warning worth more than the rest of this post: wire fraud in real estate is real, and it almost always arrives as a last-minute email changing the payout instructions. Confirm your wire details by phone with your own attorney, on a number you looked up yourself, never from an email.

When does a cash offer deserve a no?

When your house is in good condition, you are not under time pressure, and you can tolerate a few months of uncertainty. A tidy, mortgageable, three-bedroom in a sought-after Nassau school district with nothing deferred and no deadline on you will almost always net more on the open market, even after commission. That is not a hard call and we will tell you so.

The honest case for a cash sale is narrower, and it is about certainty rather than price. It fits when the house needs work you will not do, when a date is driving you — a foreclosure auction, a job start, a closing on the next place — or when an estate has to be settled among people who do not agree. If none of that is you, take the listing route with our blessing.

And if it is you, what you are buying is a closing that does not fall apart — which is why the four stops above are worth an afternoon. A buyer who can show a matching proof of funds letter, name the attorney holding your deposit, and tell you exactly how the money arrives is a buyer whose closing will happen. One who gets vague at any of those four points has told you what you needed to know.

Ask us the four questions

We are a family-run business and we would rather be asked than assumed about. When we buy houses on Long Island, we will send you the proof of funds letter, name the escrow attorney, and tell you the closing date we can actually hold to — before you decide anything. There is no obligation and no cost to finding out what the number is.

Fill in the form below for a no-obligation cash offer, or just call us at (347) 685-9317 and talk it through with a person. Either way, ask us the four questions.

Get Your Free Cash Offer Now!

Fill out this form to get your no-obligation all cash offer started!