While it is true that most homebuyers have to make a home loan to acquire it, a large group buys in cash; they are the desired cash sales. For those who have the possibility to do so, this brings many benefits of saving time and money. Although this is real, it is important to clarify that this does not mean that monthly payments aren’t needed to be made for other things like maintenance, insurance or taxes. If you can buy in cash, but you doubt if it is convenient or not, here are a few advantages;
Although they are still at low levels, if you calculate how much you pay for these in the life of a mortgage loan, you will realize that sometimes it is triple the principal. It may not sound so dramatic, but if I tell you that for a $200,000 house, you will end up paying $600,000, and you will realize what it represents. When buying in cash, you pay the selling price only and zero interest, which represents an immense saving
No qualification is required.
The most important requirement for a loan is that the buyer qualifies and when he does not, the purchase cannot be made. In the case of cash purchases, it is not necessary to qualify, nor does the house have to do so. Many loans require specific property conditions to be approved, but not in case of cash sales, so it depends on your criteria and what you are looking for, although an inspection is always recommended.
You have advantage over other buyers when making offer.
The reality is that every buyer can submit offer, but the sellers love cash buyers. When they see an offer with the certainty that the buyer has the money and it is not up to them to approve a loan, they know that the process will be easier and faster.
You have better chances to negotiate.
By being able to make a faster transaction without the risk of not having to approve a loan, it puts you in a better position to negotiate. You could get a discount on the sale price or additional incentives that may include closing costs or some additional equipment in the house.
Less amount of expenses when buying
We all know that buying costs beyond the selling price. When you buy in cash, closing costs sometimes fall to half or less, which is significant. This is because there are no obligations to pay the insurance required by the mortgage loans and you do not need to make an appraisal, of course, both elements are recommended but optional. Insurance is the way the name says ‘insure your investment’ and the appraisal will give you the confirmation that you are buying at fair value of the property.
Easier to Sell
When you decide to sell the property, the process of your part as a seller will also be easier and cheaper for you. You will not have any fees for mortgage cancellations or paperwork with the bank because there is no loan, although you must submit the documentation of the title of the property in order to make the sale.