Closing Money: Baseball Cards and Collectables as Closing Money

In the search for funds to close, there is an oft-overlooked source that could be right under your nose — or at least somewhere safely tucked away inside your closet. How about that 1952 Mickey Mantle rookie baseball card? Sound silly? It’s not. That baseball card has real value and can be readily sold to a collector.

But what if you did not want to part with your card or your prized PEZ collection? Could you access the equity in such items in order to buy a home? You bet you could. Be it an antique, a piece of artwork, car, collectable or any other asset.

The principle in such a transaction applies to any asset that can be independently appraised by a third party. To make this work, you need to be careful in both documenting the value of the asset as well as documenting the funds received should you sell it. For example, let’s say you have a first edition autographed copy of In Cold Blood by Truman Capote that’s worth $2,000. You would first have the book appraised by an expert. Keeping a copy of the appraisal, you could then sell the book and document the sale with a copy of the receipt and deposit the money into your bank account. Or, you could also borrow against the value of the book.

Lenders will allow for a secured loan to be counted as legitimate funds available for closing, as long as the terms on the loan are figured into your debt ratios. That way you won’t have to part with your beloved 1952 Mickey Mantle rookie baseball card or your copy of the Capote book. You can borrow against these — as long as you can find a lender willing to give you the loan. Collectables such as baseball cards, while valuable, are much less commonly used as assets than automobiles. But they can be just as fruitful.

So, if the lender can independently obtain a legitimate value assessment of the asset that matches up with the appraisal, then you potentially have another tool to help you fund your home purchase.



Financing Solutions with David Reed