Buying a home with Cash - Posted by Gary

Posted by John Corey on November 01, 2005 at 16:50:42:


If you wanted to pull out your old paperwork you can take a look at the HUD. Many of the line items on page two will be related to borrowing when you buy. Some of the line items (the lower cost ones mostly) are fees you will still pay when you buy or sell unless the other party agrees to pay them for you.

So, when buying for cash many of the costs associated with a purchase go away. A better way to say this is the costs related to a purchase stay and the costs related to borrower money go away.

  1. You should still get an inspection so you know what you are buying.

  2. You should strongly consider title insurance to cover possible title defects found later.

  3. Recording and escrow fees and costs will still exist.

  4. You can agree what ever you want with the seller. If they are really motivate you might get a lower price or they might agree to pay the buyer’s closing costs (even if you are borrowing). It is up to what you agree.

Is the seller is being relocated by a company (corporate relo) such deals sometimes include all closing costs so the seller will be fine with taking on your side of the costs if they get a better deal (faster close, better price, less hassle). Granted your target locations do not sound like this.

WARNING. If you buy for all cash in a depressed area assume that the area might stay that way so trying to sell later can be an issue. Get a great price on the way in as you might have to offer a great price on the way out.

Technical note. Given your business being close to a higher speed network connection or a home with good electrical can be important. Be careful when looking at rural locations to see what network options really exist.

John Corey
Chelsea Private Equity, LLC

Buying a home with Cash - Posted by Gary

Posted by Gary on November 01, 2005 at 16:40:52:

There are some homes available in an area with very few jobs that have extremely low prices. I’m looking for a home for myself. I run an Internet based company, so having employment opportunties is not my concern. I have enough money to pay cash for many of these homes. The last time I applied for a morgage, they had all these fees. They had inspection fees, apprasial fees, closing costs, and all that. By paying in cash does that mean I can avoid paying all these fees?

These homes are in very poor counties. There’s very little government, few schools, people, and large cities. It’s primarly a rural area. Which is perfect for me because I’m only concerned with a low cost of living.

My question is. What’s involved when buying a home with cash?