Buying a house with cash may be appealing to most homebuyers who need to secure a home faster. With this, conventional wisdom will tell us that buying a house with all cash is the best move. However, the reality is not that simple. There is a downside to all cash payments.

Challenge in registering title and deedcan you buy a house with all cash

Giving cash to the seller is a simple process, but getting the sale registered is stressful. It will also take another process to transfer the deed to you because it involves clearing loans against the property. If this is not addressed as soon as possible, it may result in tax bills, interest, penalties, and a net loss for the home buyer.

Banking regulations

You may also run afoul of specific banking regulations, in which case your withdrawal of all that cash may trigger specific investigative procedures aimed at preventing money laundering.

You might be forced to pay sales taxes

Keep in mind that the seller may owe sales taxes, and while this is not directly your concern, it is far better if the transactions are handled by a real-estate lawyer (and, more importantly, a paralegal) who ensures all of these issues are addressed correctly.

Doing away with inspection could cause adverse effects

Paying in cash is always an excellent way to cut out the middlemen. It will work fine for you because you will be saving money compared to paying for a home with a mortgage. However, the real issue arises when you bypass the Federal Housing Administration (FHA) or home inspection. This will result in a loss of value for your money if you discover that there is something you did not inspect thoroughly with your untrained eye.

No Mortgage, fewer cash reserves

For many homebuyers, paying for homes all in cash will severely deplete their cash reservists, leaving them without safety worth for a while. When a slight emergency comes their way, there is no escape sequence for that, but it requires dealing with the matter head-on. The home will be forced to acquire home equity loans that accrue a monthly payment with associated interest. Paying house all in cash in this scenario will be equated to living in uncertainty.

Unexpected maintenance may be an issue

If you spend all the money purchasing a home, you will likely not remain with cash to renovate your home.

Final thought

Buying a house with all cash has more drawbacks than advantages. If buying a home in cash will deplete all of your cash reserves, consider a mortgage plan.

Contact Matin Real Estate Group at any time to start searching Portland real estate. We’d love to help you get the home you really want!

More Tips:


Leave a Reply

Your email address will not be published. Required fields are marked *

seven + twenty =