Advantages of Paying Cash
One of the biggest benefit of cash payment is faster closing. When there is less paperwork, you save time. You don't have to wait till the loan is sanctioned or till the assets are sold, you only give the money and take the property. You are saved from giving mortgage payments.
Another benefit is that you don't have to worry about market fluctuations, as you make the payment at one go, and the sellers are also happy and secure as they get the money instantly.
Disadvantages of Paying Cash
The disadvantages of paying with cash are subtle. You may realize later that if you had invested the money somewhere else, you could have got higher returns. House is not a dead investment, but it is not even a great asset that can earn you something in future. Instead of home buying, investing in bonds, stocks, and real estate would help fetch more money.
You can also consider taking out a mortgage instead of paying everything outright. At the end of the year, that would deduct home mortgage interest on your taxes and you can save a lot. These were some of the disadvantages, but if you have a proper financial planning then you may not have to worry about these shortcomings.
How to Buy a House With Cash
The above pros and cons should have resolved your dilemma - "should I buy a house with cash?" If yes, then there are few simple steps involved in home buying with cash that you have to follow to get your dream house.
- You have to decide which property you are interested in and inspect it properly.
- Once you decide on that, you need to contact the owner or the broker to negotiate about the price. It is better to contact the owner since you are paying with cash.
- If you can afford the house, make a purchase offer and be ready to pay the token money.
- Contact your investment advisor and get the title search conducted. It is essential to involve the experts if you are a first time home buyer.
- Sign all the purchase and sales agreement documents, involving a real estate attorney.
- Now decide on the closing date and arrange for the cash on that date. Review your closing costs and contract once again.
- You may pay in cash or may convert the cash in cashier's checks as they are easy to handle and carry. Sign all the settlement and deed transfer forms and complete all the legal formalities. And now the house is yours.
Now you know how easy buying a house with cash is. So if you have enough cash savings for the house then what are you waiting for. Go ahead and own a home sweet home!