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I was fortunate to purchase a used car several years ago with cash, and I had the keys in no time.
Is it the same for real estate? We've found several great deals online recently, and once we make up our minds as to which one we like best, I'd like to be able to just be done with the whole process in a couple of weeks, not months. I know we'll still have to have appraisals and inspections done, maybe even a survey. Will a little extra cash help coordinate everything a little faster?
Yes it would speed up the process as there would be no finance contingency period and once your due diligence period has been completed, you could close. However, I would still have an appraisal, inspection conducted, survey if you wish and purchase owner's title policy.
It depends on the seller's situation too. If the house is vacant, yes a quick closing is easy. If the house is occupied, they might snuff at your quick closing and get overwhelmed too much where your cash and quick closing just adds stress to their lives. You need to take into account if a seller still occupying the house would be willing and able to get out quickly. Some can, and some just won't.
No appraisal needed No inspections needed No survey needed
Just title search, escrow, etc.
Do all of these things anyway.
There are two basic reasons to have a mortgage:
1) it's the only way that most can ever manage such a high dollar purchase (90% of buyers)
2) cash management ... to use that cash for other purposes and deduct the interest (10% of buyers)
Even if you're retired, with deep pockets and looking at your "forever" house...
you'll almost always be better off by NOT paying it all down at once.
Number 2 is especially true these days. If you can afford to pay cash, your income is likely to be high, so the tax benefits would be considerable. Additionally, with interest rates so low, it may be wiser to borrow for the house and invest your cash elsewhere for a higher rate of return.
Quote:
Originally Posted by MrRational
Do all of these things anyway.
There are two basic reasons to have a mortgage:
1) it's the only way that most can ever manage such a high dollar purchase (90% of buyers)
2) cash management ... to use that cash for other purposes and deduct the interest (10% of buyers)
Even if you're retired, with deep pockets and looking at your "forever" house...
you'll almost always be better off by NOT paying it all down at once.
Even if you're retired, with deep pockets and looking at your "forever" house...you'll almost always be better off by NOT paying it all down at once.
I disagree. Paying a bank $4 in interest to save $1 in taxes makes no sense at all. You are always better off paying NO INTEREST and paying cash. But people rarely have the money to do that.
It depends on the seller's situation too. If the house is vacant, yes a quick closing is easy. If the house is occupied, they might snuff at your quick closing and get overwhelmed too much where your cash and quick closing just adds stress to their lives. You need to take into account if a seller still occupying the house would be willing and able to get out quickly. Some can, and some just won't.
Yes. We are trying to settle on one that is already vacant; the one in fact was just never finished with the cosmetic stuff! Don't want to scuttle anyone out before they're ready.
I see what some of you are saying about the mortgage, but we figure with taxes, maintenance, insurance, and any repairs, we really don't want that monthly payment hanging over our heads too. This will be (hopefully) a place for recreation and not much upkeep, but you know how that goes.
Being that we're looking out of state and away from our hometown, I think I'll go with the inspection at the very least. Relocating is tough enough without knowing the area and any local problems that would be encountered there.
Thanks for all the replies!
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