3 Tips For Buying A Home With Cash

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If you have the funds to pay for your next house in cash, doing so may be a good choice for you. Cash buyers have some distinct advantages when it comes to the negotiations process. You can close the deal faster and with less fuss than someone who has to go through a mortgage approval process. For a seller who's motivated to get rid of their old house and move on, a buyer with cash in hand is an attractive proposition. You may even be able to leverage your position to get a better deal on the price of the house. However, buying a house with cash isn't as simple as buying an item at a store. Take a look at a few tips that can help you buy a home with cash.

Take Stock of Your Finances

You can't pour all of your funds into a house and leave yourself without the money you'll need to cover emergencies, repairs, or living expenses. You'll need to take stock of your finances ahead of time to figure out if you have enough to buy the house and cover the costs of any necessary home repairs, legal issues with the home's title, and your ordinary expenses.

You will save money upfront by buying a house with cash, because you won't have to pay a loan origination fee, closing costs, or other lenders fees. You'll also save by not paying interest on a loan every month. However, you'll be losing money in other ways. For example, you'll be missing out on the tax breaks that you would have gotten with a mortgage – for a home loan under one million dollars, the interest is fully tax deductible. You can make up that shortfall by calculating what you would have spent in interest each month had you gotten a loan, and depositing that money in a high-interest-bearing savings account or other financial product instead.

Don't Skip the Home Inspection

Without a mortgage lender calling the shots, you can avoid the home inspection if you want to – but don't. As a cash buyer, your purchase will move more speedily than the typical home purchase, so you'll have fewer opportunities to discover problems with the house or change your mind. You'll be doing yourself a favor by slowing down long enough to have the home inspected in case there's a deal-breaking problem with the home hidden beneath the surface.

Consider asking the seller to foot the bill for the inspection. Normally, you would be the one who would pay for it, but since the seller is getting a good – and fast – deal by accepting a cash offer, they may be willing to pay for the home inspection. Be prepared to walk away from the deal if the inspection reveals an issue with the home that's going to require more money than you want to spend after the purchase. If the sellers know that you'll walk away from the purchase if the issue isn't fixed, they may be willing to pay to fix it themselves, or cut the price of the home to compensate.

Use Experienced Real Estate Experts

You stand to lose a lot if your cash deal goes sour because the house is a lemon or there's a problem with the home's title. You need to be certain that you are protected from these possibilities. Use an agent and a real estate attorney to help ensure that all the proper steps are followed before the sale is final.

If you know that you're planning on making a cash purchase, make sure to seek out a real estate lawyer that has past experience in cash purchases. Because most home sales involve loans, real estate professionals who have no experience with cash purchases may not be aware of the unique challenges that you might face, or be up for the speed at which a cash purchase can move.

Buying a home with cash can be a smart financial decision if it's done correctly. By analyzing your pre- and post-sale finances to make sure that you can handle the purchase, taking the time to ensure that there are no deal-breaking problems with the home, and hiring experts that are familiar with this type of purchase, you maximize your chances of making the best choices with the funds that you have available. 

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2 October 2015

Noni and the Accident

My name is Noni. When I was in college, I was hit by a car while crossing the street. My life was never in danger, but I did break a few bones and had a lot of huge medical bills. I was hoping I wouldn't have to get involved with an attorney, but unfortunately, it came down to that. I used a family friend who is an accident attorney to get some compensation. A few years later, I was hit while riding my bike and had to go through the same process. I suppose I'm lucky to be alive. And it's thanks to accident attorneys that I have been able to put my life back together. I started this blog as a way to let others know just how much lawyers can help you in certain situations.