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New York

The myth of the ‘all-cash’ foreign buyer

<i>International purchasers may pay in cash, but often they're bankrolled by mortgages in their home countries</i>

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From the November issue: It’s an oft-repeated mantra in New York real estate that foreign buyers pay in cash. Indeed, their ability to come to the negotiating table with rubles and renminbi and reals in hand — ensuring a quick closing — is seen as confirmation of their affluence.

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“The perception here is that because they’re not getting a loan in the United States … they are these really wealthy people putting down hundreds of thousands of dollars,” said Marc Fitapelli, a Manhattan-based commercial and residential real estate attorney.

But that’s not always the case.

While everyone knows when a foreign buyer obtains a mortgage in the U.S., when they get a loan in their home country — secured against cash, stock, local real estate or other assets — U.S. sellers, brokers and attorneys are often none the wiser. [more]