# Paying cash for a house



## thesedays (Feb 25, 2011)

VERY long story made short: I have found a house I really like, and I realized that I could do this. If there's any place where other people have done this kind of thing, it's here, so I would like to know others' experiences with this.

They are FSBO, but I would definitely work with a lawyer and a Realtor. I already know who I would call.


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## DEKE01 (Jul 17, 2013)

I bought a foreclosed house from a bank in January. I told them I could pay cash and close in 3 days, so they took the offer. I later learned they had turned down the same price 6 months before, but it had been contingent on financing. Cash talks.


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## copperkid3 (Mar 18, 2005)

I've owned/purchased/built 10 homes so far in my lifetime,
and with the exception of the very first one (which I did buy
outright, but sank everything I had into, and then had to 'borrow'
the rest in order to finish it up, from my mother- we then became 
co-owners of a duplex rental and it was the best money maker, 
either of us ever made) all the others have been paid for with cash. 

Never owed a dime to anyone; didn't have any mortgages 
and the banks lost out when I realized that they weren't needed.

Then I made the biggest mistake of my life and got married.....
and eventually lost all of them but the last two. Best advice that
I could give someone, is* NEVER* co-mingle your finances that were 
earned or inherited *BEFORE *you take the plunge. You may live to regret it.


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## thesedays (Feb 25, 2011)

This isn't a foreclosure; it's simply a couple who wants to move to a bigger house before having another child.

I'm single, and have the money in investments that would be easy to liquidate. Being able to pay less than $2,000 a year to live in My Own House sounds really good, doesn't it? I'm sure apprehensive about writing such a huge check, however!


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## Guest (Sep 29, 2014)

Not carrying a debt is one of the most liberating things... 

Do you have enough of reserve funds where living expenses won't be a concern?


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## thesedays (Feb 25, 2011)

TraciInTexas said:


> Not carrying a debt is one of the most liberating things...
> 
> Do you have enough of reserve funds where living expenses won't be a concern?


Yes, and I have a home-based business, so I do have income.

I realized a couple years ago that I could retire at an incredibly early age, so I did.


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## Guest (Sep 29, 2014)

Sounds like you have thought this through...


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## thesedays (Feb 25, 2011)

TraciInTexas said:


> Sounds like you have thought this through...


I have. How I pay my bills is nobody else's business as long as I do, and that the money is earned and invested legally. I'll probably tell my family if they ask.


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## po boy (Jul 12, 2010)

You don't need a realtor.

A good real estate attorney can draw up the purchase contract, search the title and close the sale.


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## DAVID In Wisconsin (Dec 3, 2002)

As someone said in a previous post, cash offers move you to the front of the line. I pay cash for my rentals and I have found they accept much lower offers that are all cash, no contingencies and close in 2 weeks or less.


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## willow_girl (Dec 7, 2002)

I'm going to cast a dissenting vote here. I heard a radio ad yesterday indicating that mortgage rates are in the 3 percent range right now. If your investments are performing substantially better than that, it may behoove you to leave your money where it's at and take out a mortgage instead. After all, if you have the money in reserve, you could always pay it off at any time -- for instance, if the market turns down and you're not making as much from your investments.

Just something to think about. 

Oh, if you are prequalified for financing in advance, and have a bank letter to that effect before putting in your offer, the buyer probably will regard it the same as a cash offer. What buyers don't want is to get stuck waiting for someone to qualify, or (worse) to sell a property they own. Those contingency deals are a pain in the rear.

In any case, I'd recommend having a title search done, and perhaps buying title insurance to protect yourself in the event of problems later.


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## CraftyLady (Jul 18, 2014)

We had quite a surprise when we were young and in our first house. My hubby needed to move to a larger city for a job promotion. We were remodeling the last bit of our house when this happened. A woman we didn't know in our small town came to the door. She had been asking at the local cafe if there were any homes for sale and someone mentioned that we were remodeling our home just down the street. She walked over and asked if our home was for sale and could she walk through? We walked her through and 2 weeks later we were living in the city. She asked nicely if we mined if she paid cash? Wonderful! Got us started and where we are today. 
(we moved out of the city asap btw)


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## DEKE01 (Jul 17, 2013)

willow_girl said:


> I'm going to cast a dissenting vote here. I heard a radio ad yesterday indicating that mortgage rates are in the 3 percent range right now. If your investments are performing substantially better than that, it may behoove you to leave your money where it's at and take out a mortgage instead. After all, if you have the money in reserve, you could always pay it off at any time -- for instance, if the market turns down and you're not making as much from your investments.


A valid point. I was offered a loan at 2.8% for a 5 year adjustable a couple of weeks ago. You can take the loan out after you purchase the house so that you can still have the leverage of a cash deal on a home purchase. 

The problem with comparing hard assets to paper assets is that yes, if you owned stocks over the last 5 years, you did way better than 3%. But if you took out the loan in 2007, like I see with many homes on the market now, you lost money in stocks and got upside down on the house loan. 

If you owned the house out right with no loan, you still have the intrinsic value of the house. No matter what its market value goes down in a real estate crash, it still gives you a place to live or rent out to others. 

I think it all depends on your tolerance for risk and your own life circumstances. For me, I have retirement funds invested in private small businesses and the stock markets. Real estate gives me a diversification that helps me sleep better at night.


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## thesedays (Feb 25, 2011)

willow_girl said:


> I'm going to cast a dissenting vote here. I heard a radio ad yesterday indicating that mortgage rates are in the 3 percent range right now. If your investments are performing substantially better than that, it may behoove you to leave your money where it's at and take out a mortgage instead. After all, if you have the money in reserve, you could always pay it off at any time -- for instance, if the market turns down and you're not making as much from your investments.
> 
> Just something to think about.
> 
> ...


I haven't had a steady income for over 2 years, and my liquid investments aren't earning much interest either. This is why I would probably NEED to do it this way anyway.


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## where I want to (Oct 28, 2008)

Buy title insurance? The search by a title company will be less expensive if not done by an attorney. This is a very tentative remark because I am not that experienced, having purchased only three homes in my time. But around here there are a lot of property line issues and it's good to have it checked for previous contestings.

Also you need to add the cost of insurance and maintenence to your budget. And do sone looking online for recent comprables to check out value. And talk to neighbors to see if there are any known issues.

Good luck. I've always loved owning a home.


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## FarmerKat (Jul 3, 2014)

We bought our property with cash (it came with 2 houses and enough land to start a small homestead). We also both had retirement savings in investment accounts over many years. While I have seen good ups in my investments over the years, I have also seen many huge downs. Overall, we have never seen our investments earn 10% consistently that you always see retirement planning calculations. 

So having a roof over our head that is paid for is worth foregoing a low interest rate from the bank (at least for us). We are renting one of the homes and make 8-9% a year on the amount the home is worth. We are happy with that kind of return. 

We have spent the last 5 years looking for property for our homestead. We used realtors but gave up on them. In the end, we found a FSBO and just hired an attorney to do the closing. His fees were WAAAAY less than paying extra 7-10 % for a house because it is listed by a realtor. I cannot remember the exact figure but aside from property taxes, our closing costs were well below $1K. We agreed with the sellers on splitting the attorney's closing fees. 

Frankly, I seriously doubt we would ever use a realtor again. There is too much pressure to find something fast (OK, here are the 10 properties I showed you, pick one) and the fees are high. We will just use an attorney to be sure the legal stuff is done properly.


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## Mike CHS (Apr 3, 2011)

It took us over two years to find the right place because it had to be the right fit that let me keep working for two years after the purchase. I have seen my retirement accounts go from plush to literally no increase over a year so I never considered that in our planning. 

I'm a firm believer in Murphy's Law which means for me that I will never have a mortgage. Even if you get a loan at 2%, what happens when you get into a situation that takes a bunch more than you could ever have planned for? We can always pay as much as we can for a disaster but at the end of the day even if we can't pay we still have our roof over our heads.


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## rxkeith (Apr 13, 2009)

if you are in a position to pay cash, then to me its a no brainer.

we paid our first house off within 5 yrs. during the time we lived there, real estate values were increasing 15-17%, and had been for some time.
when we moved, after selling that house, we paid cash for a small house in town, and 2 yrs later paid cash for our current old farm house on 40 acres.
eliminate debt, and you reduce the time you need to work. never take on debt if you don't have to.
a real estate attorney will make sure there are no issues with the property. money well spent.

go for it


keith


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## AlienChick (Feb 13, 2012)

We purchased our farm FSBO about four years ago.
We don't have conventional jobs, so no tax returns, so no way to get a mortgage. BUT we did have enough cash saved up to pay cash for this particular farm.

We found this place online and drove out to see it in person. The owners even invited us to stay overnight in the place. We hired a home inspector to inspect the house, and after receiving his report, we made an acceptable offer to the owners and then hired a local Title Company to draw up and file the necessary paperwork. Worked like a charm! The owners moved to another State, but we are still great friends with them to this day. 

I've bought and sold over a dozen homes over the past 30 years and this one was BY FAR the easiest and most pleasant!

And it is VERY nice not having to worry about paying a mortgage!


That's my 2cents! :happy2:


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## Belfrybat (Feb 21, 2003)

I've purchased the last two places I've owned with cash. On both, I got a considerable discount since the owners knew they didn't have to wait for me to qualify for a loan. I went through a realtor, but only because that is how both properties were listed. If I were to purchase one FSBO, I'd skip the realtor and go straight to the Title Company. They will do all the paperwork and all I'd have to do is show up to sign the papers. 
I would get an inspection done as to me that is wise. But I've also found serious things wrong with the house that an inspector missed.


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## ChristieAcres (Apr 11, 2009)

As a Managing Broker in real estate, I would never purchase property without utilizing another Realtor or a Real Estate Attorney. Even though, I was also a Loan Officer for 7 years. If I had the choice, I would absolutely pay cash for a home, rather than finance it. As it is, we are paying larger payments on our property, just purchased earlier this year, so that we will pay it off within 5 years. We are also building out of pocket to avoid a mortgage. 

I have represented Buyers paying cash for homes and there was very little difference, except for providing a clear negotiating edge and closing more expediently.


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## BohemianWaxwing (Sep 13, 2014)

We've purchased way too many properties. The last couple have been cash. It certainly does make things easier. If you don't have to use a realtor DON'T. The closing attorney will make sure everything is done correctly. Spend the money you save on a quality inspection so you don't run into any nasty surprises after moving in. And spend the couple hundred for title insurance. It's a one time expense that you hopefully won't ever need but will kick yourself for not having if you do need it.

Sounds like you're in a good situation!


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## GoldenCityMuse (Apr 15, 2009)

Did not pay cash for my home, but ended up getting financing from my mom. She rec'd a higher interest rate than from her CD's, and I did not have to financially qualify.

It's all paid off now, there is no peace like knowing you own it. Plus it takes the fraudulent, rigged banking system out of the equation.

The house where you live should not be considered an investment, it is your home, your shelter, the place to raise your family.


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## mekasmom (Jan 19, 2010)

willow_girl said:


> In any case, I'd recommend having a title search done, and perhaps buying title insurance to protect yourself in the event of problems later.


You need title insurance. We have purchased homes with cash, but always get title insurance. Yon't want to risk your investment on some title glitch from 20yrs in the past that you don't know about. Cash is always the best way to purchase homes. Buy low with the green stuff up front for a better prices.


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## AriesMaverick (Jul 8, 2012)

We've bought our car, land, a log cabin kit, and paid for the birth of three babies, all with cash. It's a wonderful freeing experience  . I don't do well with the stress of being under obligation to others for very long. It definitely makes you more thoughtful about purchases.


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## edcopp (Oct 9, 2004)

thesedays said:


> VERY long story made short: I have found a house I really like, and I realized that I could do this. If there's any place where other people have done this kind of thing, it's here, so I would like to know others' experiences with this.
> 
> They are FSBO, but I would definitely work with a lawyer and a Realtor. I already know who I would call.


You say you would work with a Realtor. My question is why? The function of a Realtor is to bring buyer and seller together. It sounds to me like you have already done that little chore.

The next step involves a lawyer, or a title company (almost always owned by a lawyer or a few). 

Most likely you will want a lawyer to draft the purchase agreement. A very simple thing since you will be paying cash. In my state lawyers also sell title insurance, Realtors do not. 

As a matter of fact once the buyer and seller have been brought together, and ther are no conditions regarding the sale; there is very little for the Realtor to do other than wait for a pay check. 

Congrats on being able to make a purchase for ALL CASH. This is a very satisfying thing, and yes I do know from experience.


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## DAVID In Wisconsin (Dec 3, 2002)

I have to agree with edcopp. I have a very good realtor that I rely on. But his only job is to help me find a property. Sometimes I find a FSBO without his help and he just congratulates me but stays out of the way. Once I find a house I need a title company, not a realtor. Hiring a realtor after finding a place is like hiring a painter after you have painted the living room.


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