Right now, the vast majority of all home buyers are purchasing homes with cash. Cash sales are at the highest level in the last 10 years per data from the National Association of Realtors. In fact, roughly 32% of all home sales nationwide were cash buyers as of January, 2024. Cash home sales are categorized as purchasing a house in full without a traditional mortgage, typically via a wire transfer or cashier’s check and not actual paper currency. Cash sales can have many advantages for both the seller and the buyer. Certain advantages like owning the house free and clear for the buyer and the possibility of a faster closing timeline for the seller are just a few. On the off chance that you’re thinking about making a cash offer, 757 Offers recommends having a solid understanding of the local real estate market. For instance, Binghamton, New York and Virginia Beach, VA are two extremely different markets. In the event that you are contemplating making a cash offer, it’s smart to tell your real estate agent ahead of time, as it’s a great bargaining chip to use during negotiations.
Strategic Advantages
As a cash home buyer, you may have an edge in a cutthroat market because home sellers don’t have to stress over your financing falling through. This happens in some cases at the last second on the off chance that a purchaser can’t get approval from a mortgage company. For the seller, cash sales should help to simplify the entire process. It reduces closing costs for the buyer and allows for faster closings, which can be a great value to sellers. You’ll save time since you won’t have to deal with all of the paperwork and administrative obligations that accompany applying for a mortgage. In the event that you purchase with cash, you will not have to pay on the loan or any various charges associated with a mortgage, which could save you thousands, or potentially many thousands, over your life. Finally, closing costs are reduced substantially when you purchase a home with cash because you will not have additional end expenses and lender charges that come from a mortgage lender.
Own Your Home Free And Clear
Your home will be totally yours. You can have an overwhelming inclination of reassurance knowing that, regardless of whether the housing market fluctuates, you own your home free and clear.
Disadvantages When Buying A House With Cash
Purchasing a house with cash limits your liquidity, which can be a major disadvantage in the event that you don’t have enough cash on hand. Unexpected costs spring up knowing how much home repairs can cost and having a plan in place to repair prioritized items can help to limit the unknowns. There’s also no mortgage tax deductions due to not having to pay interest on a fully amortized mortgage. Assuming you purchase a house using a mortgage, you are qualified for mortgage tax deductions that can decrease your taxable income.
What You Still Have To Pay
While you do reduce closing costs when purchasing, at the end of the day, you will still have to pay real estate property taxes. It’s also highly recommended that you carry a homeowners insurance policy in case of a fire or other catastrophic event. Obvious home repairs are always looming around every corner and should be addressed within a reasonable time to assure less damage and more repairs. Finally, one of the largest concerns for a cash buyer is the inevitability of the market crashing or depreciating and losing value. Understanding the larger picture can help to mitigate these risks. As the saying goes, welcome to home ownership.
