For the past several years, real estate experts across the nation have observed that many more homebuyers have elected to purchase their phones entirely in cash than before. Not only do the trends indicate that cash home purchases doubled between 2008 and 2011, but they also give the implication that the proportion of cash home purchases just might grow even higher in the future. When observing the objective benefits, it is easy to understand why so many would choose to purchase a home with cash. The benefits of choosing to purchase a home in cash include, but are not limited to, the following.
A more positive impression is made on the seller
In the earliest phase of the home purchasing process, the seller must be understandably wary of the risk that their prospective buyer may not be approved for a loan that they need in order to finalize the purchase. When the buyer indicates that they intend on making the purchase in cash, however, the seller’s mind is immediately put to ease. Without the anxiety caused by being uncertain of whether or not the deal will fall through, the seller will usually be much more enthusiastic about finalizing the sale. In a scenario where the majority of competing bidders are depending on loans, the buyer who can immediately confirm their ability to purchase to the seller will immediately have an advantage, according to Cash for Homes.
More bargaining leverage
As a precautionary measure, sellers need to have a certain amount of discretion in their willingness to bargain with potential buyers. The process of mortgaging takes a long enough time all its own, and bargaining with a potential buyer who may not even be able to secure the loan that they need will take valuable time that can’t be recovered. When the seller is aware of the fact that the buyer is perfectly capable of purchasing a house with the cash that they have on hand, then they can be much more comfortable with spending time negotiating the final price to close a sale that has been confirmed as possible.
No need to jump through loan worthiness hoops
All of the volatility in the housing market caused by economic disruption in the early 2000’s has forced those who determine the requirements for loan approval to become far more discretionary than ever. Even prospective homebuyers who can clearly demonstrate creditworthiness and a consistent form of income might be required to supply auxiliary documents. There just isn’t enough room for underwriters to safely have a liberal amount of faith in loan applicants anymore. It isn’t uncommon for many perfectly qualified loan applicants to turn away from a mortgage due to the lack of options besides paying in cash. Those who intend on buying a home with cash from square one, however, can completely bypass this hurdle.
Freedom from monthly mortgage bills
The size of the chunk taken out of the average homeowner’s budget by mortgage payments is among the largest of all necessary living expenses. In the event that the homeowner actually remains in their residence for the entirety of the mortgage timeframe, then their mortgage will likely have absorbed just as much if not more money than all other residential bills combined. Simply by buying the home in cash, the gradual burden of consistent mortgage payments can be wiped out in one fell swoop. Beyond just the financial benefits of paying the mortgage off early, the lack of stress from having to keep up with mortgage payments every month can be more than enough of a reward on its own.
