5 Reasons to Buy a House with Cash
Whether you are a real estate investor or a regular home buyer who happens to have access to ample cash, you will want to consider buying your next house with cash. Cash offers many distinct advantages over financing (i.e., a mortgage loan). The transaction will be much faster and easier.
Here are a few of the best reasons to buy a house for cash, according to the real estate investment experts at PropertyLark:
1. Faster Process
Cash real estate transactions can be completed very quickly because there is no financing involved. You aren’t at the mercy of lenders, home inspectors or home appraisers. You are paying with cash, so the contract is much less complicated and the process is much simpler. The transaction can be completed in as little as a week, rather than waiting 30-45 stressful days of a traditional escrow period.
2. Simpler Process
As we just mentioned, the contract for a cash purchase is simpler and will have less red tape attached. Once you and the seller have agreed upon the final selling price, then it won’t take much to transfer the cash to them while the title is transferred to you. Of course, there is still plenty of legal paperwork. It’s just not nearly as complex as waiting for a mortgage loan to be approved and funded, which is often not the smoothest process.
3. No Interest
Depending on where you get your cash, you are not paying the interest of a mortgage loan. This money adds up over time. You’ll own your house outright from the moment the transaction is completed, so you aren’t dealing with mortgage payments and interest fees. Obviously, if you borrowed the cash from a source other than a mortgage lender, then you’ll have to deal with whatever payments and interest you’ve agreed to.
4. More Competitive Offers
Sellers are looking for good offers from buyers who have strong financial standings. Nothing is more enticing than a cash offer because there are no worries about the buyer’s funding falling through. There are usually no awkward contingencies, as well. Your offer will be more attractive to most sellers because you are paying cash and you present much less risk of the transaction falling through or being delayed for funding reasons.
5. Lower Sales Price
In many cases, cash buyers are able to purchase properties at lower prices than those funding through a mortgage loan. Again, the less-complex transaction and faster process may be appealing to some sellers. They may be willing to accept a little less money in a cash deal than they would when selling to someone who is getting a mortgage.
These are some of the benefits of buying houses with cash. How you get your cash may determine if it’s a viable solution or not. You might have built up savings, gotten a large inheritance or won the lottery. If you have the cash, then buying real estate is a very smart investment. Real estate investors may belong to an investment network or use cash from previous investments to fund new opportunities. If you are borrowing money from another source (in other words, not a mortgage lender), then you want to run the numbers and make sure it’s a good investment before getting in too deep. Debt is debt, so don’t bite off more than you can chew!
If you are interesting in buying houses for cash or building your real estate investment portfolio, consider joining the PropertyLark home buying network. We give you all the tools, resources and support you need to make the most of your real estate purchases. Whether you are buying your primary home or investing in many properties, we’re here to help. Please fill out the buyer contact form and brief questionnaire on our buyer’s pages to get started.