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NO it makes no difference price is the price, the only differenc it can make fact you can close faster w/o having to wait for lender approval and etc.
I am a Dallas real estate agent IF I were presented 2 offers on one of my listings one was all cash the other financing I would take the all cash for you could close faster IT SAVES MY SELLER extra money of faster close in approx. 10 days, than holding on waiting for a lender 30 day process.
But Dallashomes - not everyone is buying a house in Dallas and regional real estate markets and practices can be very different from one another - what may be true for Dallas, may not be true for other areas (this is evidenced by some of the answers here on this post that disagree with you).
But Dallashomes - not everyone is buying a house in Dallas and regional real estate markets and practices can be very different from one another - what may be true for Dallas, may not be true for other areas (this is evidenced by some of the answers here on this post that disagree with you).
But Dallashomes - not everyone is buying a house in Dallas and regional real estate markets and practices can be very different from one another - what may be true for Dallas, may not be true for other areas (this is evidenced by some of the answers here on this post that disagree with you).
Why did you ask the question if you had already made up your mind and were going to argue when someone had a different opinion or experience?
Just from personal history... I put an offer in 1998 on a house for $190k. The realtor came back and said they have an "All cash offer of $185k" and refused our offer. We were preapproved or prequalified, forget which is the better one. We had at least 20% down. We actually had 50%+ down, but didn't want to put that much as a down payment.
So, in my case we were rejected even though we had an offer of $5000 more than the all cash offer.
I've been off the board for a little while...just getting back. As I read through this thread a couple of things come to mind:
(1) Cash CAN generate a great discount with some sellers. With other sellers it just doesn't matter. The source of the money isn't important but the OTHER factors that come along generally are (i.e., a quick close, minimal/no contingencies, etc...) In general you are talking about a seller who is willing to trade time for money.
(2) For some people paying all CASH is the right financial move. For others it is NOT. There are some generational differences here in the way that people look at money and use it to build wealth. It depends on your goals of course, but one would have to consider whether this was the highest and best use of the capital and what the other opportunities available might be.
For example, taking a loan out allows you to use the capital to invest in OTHER ways that may well offer a more profitable return (especially in the current market conditions with low interest rates). If I can pay a mortgage of 5.75%, deduct a LARGE interest payment from my taxes AND make 6% or more on other investments...seems like a no-brainer to me. Again, I'm not suggesting that this is the right answer for everyone, but it might be worth an hour spent with a financial planner to explore.
So many people of retirement age make the ASSUMPTION that paying cash and having no payment is better for them financially. All I'm suggesting is that there are other options worth exploring.
Glad to be back. Hope everyone is having a great spring and looking forward to an excellent "rest of the year."
Dave, I know for myself paying cash for my house was the best thing FOR ME. To me there is nothing better than knowing you own your home free and clear. To me the piece of mind of owning my own home far outweighs any tax benefits. Just my opinion of course . I know if you went to an investment advisor they would recommend your route and would tell me I'm wrong....to each his own.
For example, taking a loan out allows you to use the capital to invest in OTHER ways that may well offer a more profitable return (especially in the current market conditions with low interest rates). If I can pay a mortgage of 5.75%, deduct a LARGE interest payment from my taxes AND make 6% or more on other investments...seems like a no-brainer to me. Again, I'm not suggesting that this is the right answer for everyone, but it might be worth an hour spent with a financial planner to explore.
So many people of retirement age make the ASSUMPTION that paying cash and having no payment is better for them financially. All I'm suggesting is that there are other options worth exploring.
Dave
So for every $100K I borrow about $6000 per year goes to interest. Now I get to save about $1500 a year on my taxes. In other words I spend $6000 to get $1500. Why would anybody do this?
Forget about using borrowed money for other investments. Everybody needs somewhere to live. So if you can live there for free without a monthly payment then do it. That should be your first financial priority in life. Now that you have a place to live, go out and make money on investments. Money that you get to keep every month instead of giving it to a bank. Now watch your your investments grow. Talk about a no-brainer.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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Quote:
Originally Posted by deno088
So for every $100K I borrow about $6000 per year goes to interest. Now I get to save about $1500 a year on my taxes. In other words I spend $6000 to get $1500. Why would anybody do this?
Because spending 6K to get back 1.5K per year looks like a 25% return on investment to me.
I am aware of a few cash deals that turned into something else.
Cash buyers often times leave their money in the stock/bond market and I am aware of a few situations that come closing, the buyers had lost enough principal that they could not close on time, as expected.
Cash buyers need to take their cash out of the stock/bond market or have a sufficient reserve to cover potential losses.
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