If you have the cash on hand to buy a house without a mortgage, doing so is usually a good idea. You'll pay a lot less for the house in the long run since you won't be paying interest. Plus, you can usually close a lot sooner since you won't be waiting for loan approval from the bank. But buying a home with cash does involve a few intricacies. Here are some factors to be aware of before you begin the process.
Be prepared to negotiate the price down.
Closing costs are a lot less when you buy a home with cash because you don't have to pay for bank fees. The process tends to move along a lot faster, too. You're not the only one who benefits from this; the seller does, too. For this reason, you can usually negotiate a lower price with the seller if you're buying in cash. Work with your realtor to decide what a fair market price is for the home, and then offer a bit less than that. The worst that can happen is for the owner to come back with a counter-offer.
Work with a buyer's agent who is used to the process of buying in cash.
The vast majority of home buyers take out a mortgage, so most real estate agents are used to going through the mortgage process with customers. When looking around for a realtor to use as your buyer's agent, be sure to select someone who has experience with buyers who've paid cash. They'll have a better idea of how to negotiate the price down based on your cash offer, and they can help guide you when it comes time to obtain the paperwork that documents your financial resources. (The seller's agent will typically want to see records to prove you do, indeed, have the cash on hand to buy the home.)
You'll need to pay with a bank check.
You won't want to write a personal check out for the full house price. This is not a secure way to handle such a large amount of money, and the seller will need to be assured that the check won't bounce. It might take a few days to get a bank check for purchase of the home, so be sure to plan ahead. You'll hand over the check at a closing meeting with the seller and both of your agents, and then after signing a receipt and some paperwork related to the title, you'll get the keys.
For more information about purchasing a home with cash, talk to a realtor like Thomas Brackin Real Estate.