Buying a House with Cash: What You Need to Know

Are you considering buying a house with cash? First of all: congratulations! Not everyone has this option. Most investors and financial professionals would agree it’s a great decision if it’s something you can access. Since buying a house with cash is so uncommon, there are some things you need to know before you venture into the process.

Buying a House with Cash 101

There are dozens of benefits of buying a house with cash. In addition to the fact that putting in an all-cash offer makes you a more appealing buyer to the people selling the house, it’s also an excellent way to expedite the sales process, since applying for a mortgage can take lots of time and energy. What’s more, mortgages are never guaranteed. There’s always the possibility you’ll get turned down, wasting both your time and the seller’s.

Beyond that, all-cash offers also give you the upper hand when it comes to bargaining, and you’ll be able to close the deal faster, and with less back and forth. The largest benefit, however, of an all-cash purchase is that, once you buy the home, you’re done with it. You never have to think about a mortgage payment again! This is a massive burden most homeowners would love to cast off, and an all-cash purchase is a smart way to do it.

How to Buy a House with Cash

If you’ve decided that the purchase of a house with cash is the right move for you, here’s what you’ll have to do.

1. Submit Evidence of Funds

When you make an all-cash offer, most banks will want proof of funds. This is to ensure that you’re financially capable of covering the cost. This may involve bank statements or other financial proof. You’ll typically be required to send in a large earnest deposit check as well. Talk with your banking professional about what, exactly, will be needed from you.

2. Hire a Property Inspector

An all-cash offer doesn’t alleviate you from the necessity of a property inspection. Hiring someone to evaluate the property can save you from running into expensive defects down the road. With this in mind, hire a professional to assess the property before you sign papers. You may well find defects that influence your purchasing decision.

3. Transfer All the Funds into One Account

Before you send the money into escrow, you’ll need to consolidate all the funds for the cash purchase into a single account. The great news about this is that the closing costs will be minimal, compared to a property with a mortgage, since you aren’t dealing with a loan.

Buying a House with Cash: A Smart Option for Some Buyers

If you’re going to purchase a house with cash, most financial advisers would tell you to take the plunge. In addition to streamlining the closing process, buying a house with cash is also a great way to secure a valuable asset without the headache and effort of a mortgage.