According to a recent study, almost 40% of the owner-occupied homes in the U.S. don’t have mortgages on them. They’ve been completely paid off by those who live in them.
If you would like to join these people the next time that you purchase a home, you should think about trying to buy a house with cash. After you pay cash for a house, you’ll be able to live in it with no mortgage and spend your money elsewhere.
Buying a house outright with cash isn’t necessarily going to be easy for many home buyers. But it’ll be worth it in the end when you’re able to avoid having to pay off a mortgage every month.
Learn how to buy a house with cash below.
Table of Contents
Save Up Enough Money to Buy a House With Cash
In order to buy a house with cash, you’re obviously going to need to have enough money saved up in the bank to do it. So to start, you’ll want to put together a lump sum of money in the bank to put yourself in a position to pay cash for a house.
Some people will do this by spending years saving up money a little bit at a time. You’re more than welcome to do this if you have the patience to pull it off.
But you might also want to think about trying to do it by parting ways with your current home and turning a profit on it. Selling your house for cash can help you get your hands on the money that you’ll need to pay for a new house outright.
Come Up With a Budget for Buying a House With Cash
Once you have enough money saved up to buy a house with cash, you should decide what your home-buying budget is going to be. You should take a look at how much money you have saved up in the bank and use it to determine what budget you want to use.
You don’t necessarily want to spend every single dollar that you have on a home. It won’t leave you much room for potential renovations.
But at the same time, you don’t want to pay cash for a home that needs a ton of work and then end up having to spend all your hard-earned money fixing it up. You should find something that you can afford to live in comfortably after you buy it.
Make an Offer on a House You Want to Buy With Cash
After you’ve created a budget for buying a home, you should start searching in your desired location for a house. Sooner or later, you should be able to stumble upon a home that you really like.
When you do, you should make an offer on it and be sure to let the home sellers know that you’ll be paying for their house in cash if they accept it. Many home sellers like cash offers since it makes it much easier for them to close on their houses quickly.
Put Down an Earnest Money Deposit on a House With Cash
After a home seller receives an offer from you, they’ll have some time to mull it over and decide whether or not they want to accept it. If they choose to accept your offer, you’ll then be required to put down what is called an earnest money deposit on a house.
An earnest money deposit is essentially a deposit that is used to show a seller that you’re serious about paying cash for their home. Earnest money deposits will typically be somewhere between 1 and 10% of the sale price of a home.
Conduct a Title Search on a Home You’re Buying With Cash
Buying a house with cash is a pretty quick process. But there are a couple of things that you will want to do before you take ownership of a home that you’ve paid cash for.
For example, you will want to conduct what is called a title search on a house. A title search is an examination of public records that will prove that the person selling a home is the true owner of it. It’ll also indicate if there are any liens that have been placed against a home that you’re going to be buying.
You might also want to consider having a home inspected prior to purchasing it. It’ll let you know exactly what you’ll get when you buy a home.
Schedule a Final Walk-Through for a House You’re Going to Pay Cash For
Regardless of whether or not you have a home inspection done on a house, you should always walk through it right before you officially agree to buy it. During a final walk-through, you’ll be able to see exactly what kind of condition a house is in.
There is a chance that whoever is selling the house may have hidden some defects located within it while selling it. You’ll be able to spot these potential problems and have a seller address them before you take ownership of a home.
Attend a Closing and Finish Buying a House With Cash
As long as everything else goes according to plan, you should be able to attend a closing for your new home and buy it with cash within about 30 days. During closing, you’ll sign a bunch of paperwork and get the keys for a house at the end.
From there, you’ll be able to move into the house right away. You can make any changes that you want to it and enjoy having no mortgage from now on.
It’ll Be So Easy to Buy a House With Cash
Buying a house can be very stressful under normal circumstances. You’re going to have to spend a lot of time working to get approved for a mortgage.
But when you buy a house with cash, you’ll find it surprisingly easy. You can eliminate most of the normal home-buying stress from the equation and purchase the home that you want in no time at all.
Browse through the rest of our blog to find more great tips on buying and selling homes.