What Steps Do You Need To Take When Buying A Home With Cash?

Submitted by: Dss Accepted

If buying on contract get title insurance. Buyers have made payments for years only to find that the seller did not have clear title – the risk is to the buyer until title is transferred. If you are paying all cash get Title insurance.

A title company will insure that you can get clear title. They will search for judgments against the buyer(s) and seller(s) and liens against the property, access and easements, water/mineral rights. Read your preliminary Title Report. The Escrow company will pro-rate taxes, insurance and record the title for you. The selling Real estate agent/or attorney in some states, will write The “Earnest money Agreement” or “contract of sale” should indicate sale price, earnest money, down payment, form and timing of payment(s) and time of transfer. this should be written to protect you and allow you to get your earnest mony back if you decide not to purchase. If the contract is unclear or can be read two ways, have it corrected before signing. Usally the title company/Escrow company holds your earnest money and interprets the contract.

Only Closing costs such as points/fees to bank, mortgage broker or lender can be avoided with a cash purchase. other closing costs: Title fees, escrow fees, recording fees, County, city taxes pro-rated – are necessary. A lender would check to see if the home was in a flood zone – did you check? A lender would check to see if the home needed a pest and dryrot inspection. Was the home appraised to determine value? Did you require a home inspection? where necessary permits obtained? Is there lead paint? asbestos? condition of roof, drainage, septic or sewer? well? Water flow and potability

I would suggest few things before buying a home for cash:

Identify Your Needs

Find A Real Estate Agent

Get Pre-approved

Go House-hunting

Make Your Offe

Negotiate

Prepare To Close

Close The Sale

Go for a new house or old house?

It depends on what kind of budget you have. Both have its share of pros and cons. Old houses will be cheaper but you may have to spend more on repairs and renovation. However, the advantage is you won’t have to run around to set up the house and will have lesser property tax and maintenance charge.

New houses will definitely attract more tax and more maintenance cost. But you can live in a newly built house, deck up the house the way you want to. It will also be easy to maintain as it is new. You can minimise the risk of escalating costs if any during construction if you go for a ready flat than booking a flat under construction. You can also avoid the possible delays of a flat under construction.

Go for a home insurance

Some banks offer insurance along with the home loan at discounted rates. The value of your home is assessed as per the area of your home multiplied by the rate of construction per. sq. feet, on the date of taking the policy. For example, if your home is 1,000 sq ft and the rate per sq ft is Rs 900, then the sum insured for your homes building is Rs 900,000. Home Insurance covers natural and man-made calamities like fire, earthquake, lightning, floods, explosion of gas cylinder, spread of fire due to short-circuit, riot, strike, cyclone landslide burglary and terrorism.

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