The Benefits of Buying a Property In Cash
According to the National Association of Realtors, the number of properties bought in cash has increased from 26% in 2010 to 32% in 2011. Although this may not be the best option to many homeowners as buying a property in cash is just a far-fetched dream, this trend is becoming more common in the real estate market.
While the factors that brought this increase remain unknown, many real estate professionals say that this is driven by reduced home prices brought about by recession and the strict standards of banks when it comes to applying for a loans. Regardless of these reasons, still paying cash is becoming a more common trend in the real estate market. And if you are someone who has sufficient cash in hand to purchase a house, do you think it is a good idea? Here is something to guide you.
Benefits of Purchasing a Property in Cash
More Efficient Buying Process:
Purchasing a home in cash will help you save a great amount of time and skip the process of having to search for a bank that would fit your needs and would approve you for a mortgage loan. You don't need to sit with a mortgage broker and hope that everything will result in a loan term that benefits you. It takes a great deal of stress off the buying process and usually leads to a better buying price.
In times of financial hardship, you don't have to fear that foreclosure since you own your house already. Owning a house gives you a sense of security that no matter how rocky things might get financially, you will be assured that your family has a place to stay and lay their heads at night.
You might be able to negotiate a better purchase price when you have cash to show, but there are many other areas you can save money. Closing costs might be less, and without a mortgage you don’t have to worry about paying monthly which cuts your overall monthly house bills.
The main advantage to paying cash for a house is that you own the title to the property you purchase once the property contract has been completed. Your only payment obligations after you've bought a house for cash involve things like property taxes, property insurance, assessments and home maintenance. Your fully owned house can be used to pull cash from if you need to do so.
When you pay cash in a property purchase, you save on certain closing costs and also gain immediate full equity in your property. You also avoid paying thousands of dollars in interest with an amortized mortgage.
Purchasing a property with cash is now becoming a trend in the real estate market, and judging by the reasons above, the reasons now seem clear. It offers great benefits if you have cash in hand for the initial cost. Just make sure you set aside some extra cash for emergency purposes, and buying a property will be a great financial move.