Call Us: (540) 433-2121

Buying a Home With Cash: Important Steps in the Process

home with cash

An increasing number of people have been choosing to pay cash for a first or second residence after analyzing benefits such as current low return on investments, closing cost savings, and seller’s willingness to discount a property to a cash buyer.  However, even in the absence of lender requirements, taking several steps when buying a home with cash is prudent.  I recommend an appraisal, home inspection, termite inspection, survey, written contract, and consideration given to acquiring title insurance.

Because a seller will try to get top dollar, you, the Buyer, need an appraisal to verify the property’s worth.  If it became necessary for you to sell the property in the short term due to a job transfer, health, or other unexpected circumstances, you may not be able to recoup what you paid.  Additionally, a lower sales price can give support for lower property taxes after the purchase.

Hiring a professional inspection company to examine the home’s structural systems and report all needed repairs is a vital step.  For this large purchase, you not only want to know what repairs are needed for negotiating with the seller to repair them before closing, but also, you want to know any serious defects that could be very costly or that cannot be corrected.  Either your additional expenses of repairs after closing, or the existence of a non-repairable structural defect could alert you to forgo the purchase.  A termite inspection carries the same importance, and radon and mold inspections should be considered.  If the property is not on a municipal sewer system, you should also obtain a septic inspection.  Know what you are getting!

A professional survey is needed to show boundary lines and to show that the house or improvements do not encroach on the boundary lines or violate any set-back requirements.  If a survey has been done within the last five to ten years, you could rely on that survey with the seller signing an affidavit that none of the improvements as shown have changed.

A contract (written agreement) is necessary to have an enforceable right to purchase the property.  All of the aforementioned contingencies or conditions should be stipulated in the contract, along with your state’s required disclosures.

You should consider purchasing title insurance from a reputable title company to assure coverage in the event of a title defect or lien(s) not apparent prior to or at the closing.  (See my June 21, 2016 blog—What Is Title Insurance and Is It Required?)

If you need assistance for a cash purchase, please contact us.

 

 

 

 

FREE DOWNLOAD!
Wondering what Business & Personal tax documents you need to keep?
Provide us your email and we'll send you
this tax information right away!
SUBMIT
Close
Downloaded our free tip sheet yet?
Learn what tax documents you need to keep and
for how long so you are always prepared!
Download
You'll also start receving our monthly tips and resources.
You can unsubscribe at any time.
Close
Download a free tip sheet on which tax documents you need to keep and for how long.
Download