Paying cash? (contingent, mortgage, mortgage, sale)

[MillerThyme]

My wife has decided it was time to stop renting apartments.

We have some money coming in sometime in January - March/2016 (unsure of exact date), and other than student loan debt with excellent interest and a few minor medical debts that will be taken cared of by that time, we are debt free. She has no credit and mine is trashed because of a hospital mishap that sent me to collections for never paying a bill that was never received. Even to this day that bill has never been delivered and they would not take payments without it. They can not even give me a number owed.

Anyways, we feel it would be best to purchase our first house with cash. We are looking at some new constructions and are curious about the process with offering cash.

Is it smart? Not like we have any other choice.

How do you make the offer?

How long does it take to finish all paperwork on a cash offer?

Can you get a better deal because of cash and how much you pay under the asking price? Any particular percentages?

Anything else we should know?

[2bindenver]

First check your credit report online. You have time to establish credit in your wife's name. https://www.annualcreditreport.com/index.action

Then, talk to a reputable, local to you, lender.

After that - you will have new steps that will help you reach your goal.

[dblackga]

1. If you're paying cash, you don't need to worry about a credit report :-)
2. Have you had an opportunity to talk to a financial advisor? There are questions that we can't answer for you: How much cash you have vs. how much you need as liquid assets, if your money would be working better elsewhere for retirement, etc., etc. It may be that you just put down a big downpayment, keep the majority of your funds liquid, and get a small mortgage. We can't really advise you on that, because we don't have any idea what your income, pension, retirement plans, etc., etc. are.
3. It's easy to pay cash, but generally, you don't get a better deal -- let's face it, with a mortgage, the seller is still getting exactly what they want, so why should they discount it for cash? The seller isn't paying anything on funding. Your closing costs will be somewhat minimal, since you aren't paying mortgage costs. Title insurance, prepaid for taxes, a few recording fees, etc. and you're good.
4. A caveat: If you are in a multiple-offer situation, being a cash buyer can be to your advantage because the seller doesn't have to worry about hiccups in funding.
5. If the house is finished, then a closing with cash can take about a week or 10 days, sometimes less if you have an attorney whose not too busy.

[GotHereQuickAsICould]

I second the suggestion to talk with a couple financial advisors and make sure you have the complete picture of the situation before moving on.

Paying cashes an advantage to those who want to close right away with no problems.

Which offer would you take?

$250,000 - close in two months contingent on my financing going through and the house I have just sold actually closes. Plus, seller nay need to pony up some closing costs depending on contract.

$225,000 - close as soon as due diligence is complete and title company can get the paperwork organized.

[dontaskwhy]

Don't forget that "Paying Cash" doesn't literally mean showing up to the closing with a briefcase full of paper currency. That would create many new issues.

On a serious note, if you have an outstanding debt from the hospital they could put a lien on your home but they couldn't force you to sell it.

[MillerThyme]

It is not much debt and since this happened their billing department has been revised. They are trying to work with us now and the lady has been very understanding.

[SouthernBelleInUtah]

You won't get a discount on new construction but you can get "free" upgrades. Builders don't discount prices b/c they don't want to set a low comparable price.

[cully]

(About the bill. You shouldn't pay interest from the time you were willing to pay but they couldn't find their bill)

If the bill is still in the way, you could talk to a good lender about getting a loan in your wife's name. Your income can be counted as household income with only her name on the loan. I know a couple where the husband got in trouble cosigning a car loan and a few other things for a dead beat daughter. The couple got a home loan in the wife's name, with the husband's income counted as "household income" toward the loan. Funny, the wife made very very little in her own name.

[601halfdozen0theother]

I paid cash when buying two houses, and both closing experiences were wonderful.


Whether or not you just go to an attorney to close or just go to a title company to close depends on not only the state but also the county in question. And the length of time it takes to close also depends on the county.


For my first cash buy the seller and I just made an appointment with a title company, and we closed in two weeks. I had my bank wire the money to the title company's holding account prior to closing. In the second instance in a different county we made an appointment with an attorney, who did the closing. I paid part by wire in advance (from the sale of my previous house) and part by cashier's check at closing. Whoever does the closing will tell you to how to handle the money with them.


So just find out in the county where you are buying whether you can go directly through a title company or should go through an attorney.


(For those out there who say you should always protect yourself by using an attorney I would have to say that my experience with the title company was much less complex and they seemed much more clear on the situation than was my experience with the busy attorney we used in the other purchase.)


Also, just wanted to say that my financial people tried to convince me that it was better to get a mortage to have the annual mortgage tax deduction, but I feel much better having no debt hanging over my head. It was worth it to me to pay cash, even if the tax deduction may have been slightly helpful overall.

[Caltovegas]

If they can't verify the debt it shouldn't be on your credit report. I say before you buy consult with an attorney. They may be just being nice because they can't find your debt. Just know your rights going forward.