Although it feels much like something only high rollers do, making a cash offer isn’t as far-flung as it used to be. Buyers can find themselves with the cash to pay for a home outright due to several different scenarios. The ability to pay for a home in cash is something that will make things easier for a buyer in many respects.
Although it feels like a cash offer would be simple and straightforward, there are some other things to consider before you decide to buy a home with all cash. You may even find that it isn’t wise for you to make a cash offer.
Here are 6 things to consider if you’ve been thinking of making a cash offer.
- Cash can give you the upper hand. In the current housing market, a cash offer gives you several advantages over traditionally financed homes. Sellers will be more attracted to your offer, you can stand out in bidding wars, and your purchase will likely encounter fewer hiccups during the process.
- What will you have after you pay for the house? This is something to consider. Paying cash for a house is a great move, unless it completely depletes your bank account. It isn’t wise to pay for a home with cash and then have nothing leftover. If a cash purchase will wipe out your savings, consider making a large down-payment then financing the home for a short amount of time to save up more money for an emergency fund or for retirement. It isn’t always the best choice to pay cash. It’s important to consider your long-term situation.
- They won’t take your word for it. Know that it’s important to prove that you do have the cash in hand before making an offer. Anyone could say that they have cash, but a seller needs to know that you’re being honest. Come prepared with a bank statement to prove your situation.
- Money can’t buy happiness, but it can buy less paperwork. This might be the deal-maker for some who might be considering a cash purchase. You will save yourself several hours of mind numbing paperwork by paying with cash. Less paperwork is made possible because you aren’t having to go through credit checks or sign mortgage paperwork.
- You’ll own the house, instead of the bank owning the house. It’s a good feeling to know that the bank isn’t the owner of your home. You will own your home at closing and will not be subject to the terms set for you by your bank.
- The sale price isn’t the only expense. Buying a home with cash isn’t like buying a blouse. You won’t simply walk away with the keys and never have any other expenses. If you’re budgeting, understand that your home will also need an inspection, local homeowners’ association fees, and yearly taxes. Owning a home requires a constant financial commitment. Although you won’t have a mortgage if paying in cash, you will still have other costs on a regular basis.
Buying a home with cash is a great move for most people who can afford it, but there are things you’ll need to consider before going forward. Although cash may feel like King, it’s not always the best route for everyone. Keep these points in mind before moving forward with a cash offer.
If you are in the market to buy or sell a home, the BC Home Team is here to help. Don't hesitate to contact us