Can You Buy a House With Straight Cash? What It Means and Why It’s a Great Idea if You Can Do it
You are looking for a home to buy in Oregon or Washington — and you want to know if it would be best for you to purchase a house with cash or not.
With all the talk about buying a house with cash, you don’t know:
- What that really means
- What happens if you buy a house with cash; and
- Whether it is possible for you to pay with physical cash
You can buy a house with cash, but there are some stipulations.
Read this article to find out what it means and why it may be a great idea to purchase a house with cash.
Table of Contents
- What Does It Mean to Buy a House With Cash?
- 6 Advantages of Paying Cash for Your Home
- 3 Disadvantages of Paying Cash for Your Home
- Can You Buy a House With Physical Cash? Why Bringing Stacks of Hundreds Isn’t the Best Idea
- Let PEGGY HOAG REAL ESTATE Guide You Through Cash Offers and Purchases in Oregon and Washington
What Does It Mean to Buy a House With Cash?
For many people, buying a house is one of the biggest investments they will make in their lives.
Purchasing a house with cash means that you won’t have to go through the hassle of getting a loan or having the approval of a bank.
Buying a home with cash can be a great option if you:
- Don’t have good credit
- Don’t want to be tied down to a mortgage; or
- Want to avoid paying interest on your mortgage
There are also plenty of people who simply like the idea of buying a home with cash.
Are you looking to purchase a home with cash in Columbia Gorge or Greater Portland/Vancouver area?
Buying a home is one of your biggest investments, so trust the experts to help sell or buy your dream luxury home with the best cash offer.
Call today for a free consultation with the professional real estate team at PEGGY HOAG REAL ESTATE.
6 Advantages of Paying Cash for Your Home
It’s no secret that there are a lot of different ways to get into the housing market these days.
The best option for you depends on your individual needs and preferences.
But, if you’re looking to buy with no mortgage, there are plenty of advantages to paying cash that can make your home-buying experience more enjoyable and less stressful.
Keep reading to learn about six reasons to consider buying a house with cash.
#1: Cash Offers Can Beat Out the Competition
Cash offers are becoming more popular than ever in today’s housing market because they give buyers an advantage over other offers in a competitive situation.
For example, if two potential buyers are both offering $200,000 for a home but …
- One buyer offers cash; and
- The other offers a mortgage
… the cash buyer is likely to get their offer accepted over the mortgage buyer.
Essentially, in home buying multiple offer situations, cash is the highest priority and can beat out the competition because sellers want:
- A more sure and faster closing on the home; and
- Fewer contingencies that allow the buyers to back out of the sale
Mortgage lenders require borrowers to go through an underwriting process, which can be lengthy and difficult.
Cash buyers, on the other hand, can often close within days or weeks of putting in an offer.
#2: You Make the Rules
Paying cash for a home may seem like an outdated way to buy a property, but it can allow you to have control in the purchasing process.
For example, you can:
- Negotiate a better deal because you’re not pushed by a seller’s agent or mortgage company
- Avoid lender-related costs and have more control over the home buying process; and
#3: You’ll Avoid Paying Certain Fees
When purchasing a home, some buyers are opting to pay cash to avoid paying certain fees.
Some of the most common fees in the greater Portland real estate market cash buyers may not have to pay include lender-related (or loan-related) fees, such as:
- Origination charges
- Application fees
- Processing fees
- Credit report fees; and
- Costs of any discount points
By avoiding these costs, buyers may save a significant amount of money.
#4: The Offer and Closing Are Usually Faster and Easier
When you are ready to buy a home, the offer and closing are usually faster and easier when paying cash because there is no need to:
- Go through the Multiple Listing Service (MLS); or
- Have an agent involved
Additionally, you can know exactly what you’re paying for.
#5: You Pay Less in Closing Costs
Buying a home can be a long and expensive process, but it doesn’t have to be.
When you purchase a home with cash, you may pay less in closing costs.
Why is this?
In a typical mortgage situation, lenders charge borrowers for a variety of services that increase the amount they will owe at closing.
When you pay for a home with cash, you’ll avoid paying lender-related closing costs and interest, which can reduce the total cost of your home purchase.
#6: You Own Your Home Outright
One way to save money on your home purchase is to buy it outright.
Buying a home outright is a great way to get into the housing market and have more control over your financial future because you will:
- Own a home with no mortgage or other debt; and
- Pay off the purchase price of the home in full
3 Disadvantages of Paying Cash for Your Home
There are a lot of cash purchases for homes right now because people want to move their cash out of the bank into hard assets.
However, there are some drawbacks to this approach that we’ll take some time to explore.
#1: You Tie Your Money Up in the Purchase
If you’re thinking of purchasing a home with cash, there are some disadvantages to consider.
For one, you tie up your money in the purchase.
If the market crashes or interest rates rise, you may not be able to sell your home for what you originally paid.
#2: You Lose Out on Mortgage Tax Deductions
For some people, the convenience of paying cash for a home and not having to pay taxes on their home purchase is worth the lost mortgage tax deductions.
For others, they see more value in taking out a mortgage and paying taxes on their home purchase so that they can take advantage of the benefits that come with owning a home.
Ultimately, it depends on your financial situation — and what you think are the best benefits for you.
#3: You’re Never Free From Expenses
The biggest disadvantage of paying cash for your home is that you’re never free from expenses.
You’ll always have to account for:
- Repairs; and
- Replacement costs
Furthermore, when you sell your home, it could take years to recoup any money you put into it. Homeownership is definitely not free.
Can You Buy a House With Physical Cash? Why Bringing Stacks of Hundreds Isn’t the Best Idea
You may be able to buy a house with physical cash with a few select title companies, but most do not accept cash.
Always call the title company to double-check whether they accept physical cash at closing before withdrawing hundreds of thousands of dollars from your bank.
If you decide to purchase a home with cash, be aware of some of the reasons it may not be the best idea, such as:
- If you get robbed, it can lead to a loss of money
- If someone has access to your cash, they could spend it
- If lawyers or brokers won’t deal with your cash at closing; and
- If you lose the money, you may not be able to get it back
Additionally, having a lot of cash can create complications with the IRS, as well as with brokers who may not deal with large sums of money.
Let PEGGY HOAG REAL ESTATE Guide You Through Cash Offers and Purchases in Oregon and Washington
PEGGY HOAG REAL ESTATE is a professional real estate agent that helps you buy and sell your luxury home with cash.
Our company has been in business for over 30 years and has helped thousands of clients find their dream homes and sell their properties.
Make a cash offer on any property, anywhere in Oregon and Washington, and own your home outright.
Call PEGGY HOAG REAL ESTATE today at 503-906-1370 or click below for more information.