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RE: The Benefits Of Buying A House WITH CASH!
We know this is right in my wheelhouse so I suppose I should throw in my 2 cents.
Agreed, buying cash certainly does have advantages:
- You can negotiate a lower price because the seller doesn't have to worry about financing falling through (the seller gets all their money day of close either way though - unless they are doing seller financing)
- You are not forced to get insurance (or you can get less insurance) since you own it outright
Those are just a couple quick ones. However, some disadvantages are:
- You likely will wait way longer to buy a home as you save up all that money, during which you will be paying rent.
- You cannot leverage that money in other investments that may have a higher % return than the 4% you are paying on the mortgage.
I do suggest, if getting a loan, putting at least 20% down when buying as you won't have to pay PMI. You also have an equity cushion in case you do need to sell it in a shorter time frame. You may take a hit, but you won't have to come out of pocket after the fact at least.
Good added insights @scaredycatguide, I just heard from a friend that is a realtor the fees of buying and selling a home are after 10 transactions will pay for the price of the home. I thought that was a market ripe for disruption.
Yeah, that makes sense if you think about it. You are paying roughly 10% between the closing costs when you buy and the real estate agent's commision when you sell (around 4% for the former and 6% for the latter) so after 10 deals on 100K properties you have spent 100K.
I suppose there is a reason I decided to do buy and hold rentals..lol, who knew!
I will have to check out more of your finance blogging that is something you can't get enough of!!
So much to learn to stay ahead... just imagine if you were unaware of the crypto world at what a disadvantage you would be at.
Yes, agreed!