Page 1 of 2 12 LastLast
Results 1 to 25 of 30

Thread: Paying for a house with cash

  1. #1
    Featured Member
    Joined
    Sep 2013
    Posts
    877
    Thanks
    173
    Thanked 704 Times in 291 Posts

    Default Paying for a house with cash

    Any input on this?

    I'm just wondering btw (at this point anyway)

  2. #2
    God/dess shanna dior's Avatar
    Joined
    May 2008
    Location
    Canada
    Posts
    4,980
    Thanks
    621
    Thanked 6,894 Times in 2,672 Posts

    Default Re: Paying for a house with cash

    Do you mean with literal cash in the form of bills, or cash as in you have the money in your bank account and don't need to take out a mortgage?

  3. #3
    Featured Member
    Joined
    Sep 2013
    Posts
    877
    Thanks
    173
    Thanked 704 Times in 291 Posts

    Default Re: Paying for a house with cash

    Either.

  4. #4
    God/dess shanna dior's Avatar
    Joined
    May 2008
    Location
    Canada
    Posts
    4,980
    Thanks
    621
    Thanked 6,894 Times in 2,672 Posts

    Default Re: Paying for a house with cash

    The first one is problematic since handing over a briefcase full of cash straight up just looks sketchy and like you have something to hide. It's unverifiable income that could potentially be counterfeit, and that can put the seller on edge. If you were selling a house, all things being equal, would you rather sell to someone who wants to hand over a bag of cash or someone who will write you a cheque? Not to mention, do you really want to carry that much cash with you on hand from wherever you are keeping it to the closing? That'd be beyond nerve-wracking!

    However, there's nothing wrong with purchasing a house with cash (in the form of cheque or bank transfer) without getting a mortgage if you can afford it. It's actually not even all that uncommon. It makes you a far more attractive buyer (you could potentially get turned down for a mortgage, after all, and it definitely speeds up the process) and have less headaches on your end too, what with not having to apply for the mortgage and make the payments, etc. Unless you have a significant amount of liquid assets though, you'd be tying up a lot in your house and that's not always ideal since houses aren't always easy to sell.

    There are far more pros and cons of course, but paying the entire amount upfront is acceptable, however less so when it's done with literal cash.

  5. The Following 3 Users Say Thank You to shanna dior For This Useful Post:


  6. #5
    Featured Member Vamp's Avatar
    Joined
    Jul 2004
    Location
    Missouri
    Posts
    1,111
    Thanks
    271
    Thanked 757 Times in 289 Posts

    Default Re: Paying for a house with cash

    As long as you can verify the source of income and that you paid taxes on that income you are fine. It will be reported to the IRS.
    Nature knows no indecencies; man invents them. ~ Mark Twain


  7. The Following 6 Users Say Thank You to Vamp For This Useful Post:


  8. #6
    God/dess
    Joined
    Oct 2005
    Posts
    6,947
    Thanks
    2,845
    Thanked 5,526 Times in 3,113 Posts
    My Mood
    Angelic

    Default Re: Paying for a house with cash

    That will not go over well with the title company. They do not want large amounts of cash in the office.

  9. #7
    God/dess whirlerz's Avatar
    Joined
    May 2004
    Location
    Midwest
    Posts
    27,134
    Thanks
    55,898
    Thanked 26,028 Times in 13,271 Posts
    Blog Entries
    1
    My Mood
    Aggressive

    Default Re: Paying for a house with cash

    Why not?^


    MANY MEN WANTED TO LAY ME DOWN, BUT FEW WANTED TO LIFT ME UP

    -Eartha Kitt

  10. #8
    God/dess Nikki_Fox's Avatar
    Joined
    Aug 2011
    Location
    USA
    Posts
    3,292
    Thanks
    7,542
    Thanked 4,306 Times in 1,672 Posts
    My Mood
    Inspired

    Default Re: Paying for a house with cash

    you can not walk in with a pile of cash to a closing - the money must be in an account and wired in - if you are using a portion of the payment as cash and financing the rest - the money will need to be seasoned in an account per the lenders guidelines

  11. #9
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: Paying for a house with cash

    The key issue involved here stems from changes in the treatment of 'cash' over the past several decades. Way back when, it was enough to be able to simply produce 'cash' bank notes to make any purchase. But as time went by, more and more questions began to be asked about the actual origin of that 'cash', and more and more restrictions began to be imposed regarding the ability to freely spend that 'cash'. These changes were arguably attributable to gov't efforts against organized crime, against illegal drugs, against terrorist organizations, against tax evaders etc. And the 'rules' were strengthened further as the result of the 2008 housing ( actually, subprime mortgage ) 'crash', where it was discovered that money borrowed from 3rd parties was ( fraudulently ) used to make 'cash' down payments by some mortgage applicants to create false equity in the eyes of their primary mortgage lender.

    While it is perfectly legal to purchase a car, boat, home or other titled property with 'cash', the state title agency is unlikely to 'ratify' the sale via issuing a new title / deed unless the history of the 'cash' used to make the purchase can be documented. That leads to checking of past years' tax returns reported income levels, leads to so called 'seasoning' requirements where the 'cash' must be deposited in a bank account for a period of time ( sufficient time for any unknown prior claimants to said 'cash' to make their existence known ), etc. Obviously, these days, if you don't have a state issued title / deed to the property, legally speaking you don't really own that property ( even if you paid the seller 100% of the purchase price in 'cash').

    With that said, I saved a ton of money on insurance costs, interest charges, etc. by making a 'paid in full' purchase of my house. But the 'history' of my money was carefully checked ... against past years tax return filings, and against bank / brokerage account records.
    Last edited by Melonie; 02-21-2015 at 06:16 AM.

  12. #10
    God/dess
    Joined
    Oct 2005
    Posts
    6,947
    Thanks
    2,845
    Thanked 5,526 Times in 3,113 Posts
    My Mood
    Angelic

    Default Re: Paying for a house with cash

    Quote Originally Posted by whirlerz View Post
    Why not?^
    The closing offices are not set up to deal with it, and there could be safety concerns with perhaps $100,000+ in cash lying around the office.

  13. #11
    God/dess SnuffleUffleGrass's Avatar
    Joined
    Mar 2009
    Location
    HearstCastle, Rosebud
    Posts
    8,848
    Thanks
    22,676
    Thanked 17,513 Times in 6,696 Posts
    My Mood
    Angelic

    Default Re: Paying for a house with cash

    Paying cash for a house is still common in regions where some properties can be barely worth $30-$40 K. However due to the Internet age it's so much easier to flag these kinds of transactions.

    Knowing what I know now after dealing with cash income for a decade, I'd bend over backwards to make the money trail look squeaky clean, even if it cost me a lot.

  14. The Following 2 Users Say Thank You to SnuffleUffleGrass For This Useful Post:


  15. #12
    God/dess whirlerz's Avatar
    Joined
    May 2004
    Location
    Midwest
    Posts
    27,134
    Thanks
    55,898
    Thanked 26,028 Times in 13,271 Posts
    Blog Entries
    1
    My Mood
    Aggressive

    Default Re: Paying for a house with cash

    Quote Originally Posted by SnuffleUffleGrass View Post
    Paying cash for a house is still common in regions where some properties can be barely worth $30-$40 K. However due to the Internet age it's so much easier to flag these kinds of transactions.
    Yes, I look @ a lot of listings, & on some of the cheaper properties they state, "cash only" in the ad.


    MANY MEN WANTED TO LAY ME DOWN, BUT FEW WANTED TO LIFT ME UP

    -Eartha Kitt

  16. #13
    Banned
    Joined
    May 2008
    Posts
    4,980
    Thanks
    3,072
    Thanked 3,517 Times in 1,922 Posts

    Default Re: Paying for a house with cash

    Well who the hell would walk in with cash( red flags) You get a cashiers check so the money still needs to be in the bank so they can verify. You can't walk into a bank with 50,000 and say can I get a cashiers check for this. Lol. I'm picturing pulp fiction with a suitcase of money walking into a house closing.

  17. #14
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: Paying for a house with cash

    Another important point: you will still want a title opinion and title insurance. So, don't skip on the closing. Get a lawyer to handle the transaction. Another thing to think about, have the home inspected. Make sure you know what you are getting. Finally, have the place insured. In short, treat this like any other real estate closing where you had a loan. And just for your frame of reference, about half of Florida real estate closings are done without a loan. Either they are snow birds buying a new home after selling theirs up north or VC funds buying with all equity. Either way, they still do a proper closing with title insurance and title opinions.

    HTH
    Z

  18. The Following 2 Users Say Thank You to Zofia For This Useful Post:


  19. #15
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: Paying for a house with cash

    Quote Originally Posted by Melonie View Post
    While it is perfectly legal to purchase a car, boat, home or other titled property with 'cash', the state title agency is unlikely to 'ratify' the sale via issuing a new title / deed unless the history of the 'cash' used to make the purchase can be documented. That leads to checking of past years' tax returns reported income levels, leads to so called 'seasoning' requirements where the 'cash' must be deposited in a bank account for a period of time ( sufficient time for any unknown prior claimants to said 'cash' to make their existence known ), etc. Obviously, these days, if you don't have a state issued title / deed to the property, legally speaking you don't really own that property ( even if you paid the seller 100% of the purchase price in 'cash').
    Maybe in New York, but no North Carolina Register of Deeds is going to inquire about the source of funds when someone goes to record a deed. the Register is going to take your deed, take your registration fee, stamp the deed with her Registers Seal and put it in the deed book. The Register isn't even going to wonder why there's no accompanying Deed of Trust. What she will do is make sure she has your social security number and the selling price information to send to the Department of Revenue. The Department of Revenue and the Internal Revenue Service most likely will inquire, but Register won't and you will have good title. NC is a race to the court house state, so it's important for the Register to act promptly and let the DOR and IRS ask questions later.

    HTH
    Z

  20. #16
    God/dess
    Joined
    Oct 2005
    Posts
    6,947
    Thanks
    2,845
    Thanked 5,526 Times in 3,113 Posts
    My Mood
    Angelic

    Default Re: Paying for a house with cash

    I have heard there used to be closings in Houston where Vietnamese immigrants came in with large quantities of silver which had previously been buried and smelled very badly.

    Vietnamese immigrants were also reluctant to buy houses in a cul-de-sac because they were more vulnerable to artillery fire.

  21. The Following User Says Thank You to slowpoke For This Useful Post:


  22. #17
    God/dess SnuffleUffleGrass's Avatar
    Joined
    Mar 2009
    Location
    HearstCastle, Rosebud
    Posts
    8,848
    Thanks
    22,676
    Thanked 17,513 Times in 6,696 Posts
    My Mood
    Angelic

    Default Re: Paying for a house with cash

    Quote Originally Posted by slowpoke View Post
    I have heard there used to be closings in Houston where Vietnamese immigrants came in with large quantities of silver which had previously been buried and smelled very badly.

    Vietnamese immigrants were also reluctant to buy houses in a cul-de-sac because they were more vulnerable to artillery fire.
    Aww I know I grew up around a lot of Vietnamese & Hmong people...some of their financial beliefs can cause problems for them (they are often targeted for home invasion robberies b/c older Asians keep a lot of cash at home, due to not trusting banks.)

  23. #18
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: Paying for a house with cash

    What she will do is make sure she has your social security number and the selling price information to send to the Department of Revenue. The Department of Revenue and the Internal Revenue Service most likely will inquire, but Register won't and you will have good title. NC is a race to the court house state, so it's important for the Register to act promptly and let the DOR and IRS ask questions later.
    NC would appear to be 'old school' in this regard. In NY, the DMV or deed / title agency will take your paperwork and fees, but will not immediately issue a certified title or deed. That happens several weeks later, after the state tax agency has satisfied themselves that the money used for the purchase has a documented 'paper trail', and gives 'permission' to the deed / title agency to create and send out the certified deed or title.

  24. #19
    Banned
    Joined
    May 2008
    Posts
    4,980
    Thanks
    3,072
    Thanked 3,517 Times in 1,922 Posts

    Default Re: Paying for a house with cash

    Quote Originally Posted by Zofia View Post
    Another important point: you will still want a title opinion and title insurance. So, don't skip on the closing. Get a lawyer to handle the transaction. Another thing to think about, have the home inspected. Make sure you know what you are getting. Finally, have the place insured. In short, treat this like any other real estate closing where you had a loan. And just for your frame of reference, about half of Florida real estate closings are done without a loan. Either they are snow birds buying a new home after selling theirs up north or VC funds buying with all equity. Either way, they still do a proper closing with title insurance and title opinions.

    HTH
    Z
    Yes. I own several houses here I know this...

  25. #20
    God/dess SnuffleUffleGrass's Avatar
    Joined
    Mar 2009
    Location
    HearstCastle, Rosebud
    Posts
    8,848
    Thanks
    22,676
    Thanked 17,513 Times in 6,696 Posts
    My Mood
    Angelic

    Default Re: Paying for a house with cash

    Oh before I entirely forget to mention this, some people use 'contract for deed" arrangements to provide wiggle room for house sales where taxes/reporting are concerned. I personally don't like the idea of "contract for deed" but I know people who have done it......

  26. #21
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: Paying for a house with cash

    ^^^ 'contract for deed' terms essentially amount to the seller acting as a 'private' mortgage lender. This is an effective work-around for self-employed persons who can't meet normal regulatory proof of income requirements, who can't meet normal proof of 'equity' regarding the origin of down payment funds, etc. But it can involve additional risks to the buyer because the seller / financier can impose additional conditions precipitating a 'default'.

  27. #22
    God/dess SnuffleUffleGrass's Avatar
    Joined
    Mar 2009
    Location
    HearstCastle, Rosebud
    Posts
    8,848
    Thanks
    22,676
    Thanked 17,513 Times in 6,696 Posts
    My Mood
    Angelic

    Default Re: Paying for a house with cash

    Quote Originally Posted by Melonie View Post
    ^^^ 'contract for deed' terms essentially amount to the seller acting as a 'private' mortgage lender. This is an effective work-around for self-employed persons who can't meet normal regulatory proof of income requirements, who can't meet normal proof of 'equity' regarding the origin of down payment funds, etc. But it can involve additional risks to the buyer because the seller / financier can impose additional conditions precipitating a 'default'.
    Yup. I would never go for it but it's popular with some people.

  28. #23
    God/dess
    Joined
    Oct 2005
    Posts
    6,947
    Thanks
    2,845
    Thanked 5,526 Times in 3,113 Posts
    My Mood
    Angelic

    Default Re: Paying for a house with cash

    Quote Originally Posted by Melonie View Post
    ^^^ 'contract for deed' terms essentially amount to the seller acting as a 'private' mortgage lender. This is an effective work-around for self-employed persons who can't meet normal regulatory proof of income requirements, who can't meet normal proof of 'equity' regarding the origin of down payment funds, etc. But it can involve additional risks to the buyer because the seller / financier can impose additional conditions precipitating a 'default'.
    If the seller can do that, the seller can give a Deed and take a Deed of Trust.

  29. The Following User Says Thank You to slowpoke For This Useful Post:


  30. #24
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: Paying for a house with cash

    ^^^ technically true, but still the same end result ... that the buyer will not receive clear title to the property until ALL of the private finance seller's contract conditions have been satisfied in every detail, despite the fact that the buyer has made every 'good faith' effort to satisfy the seller's conditions. Where mortgage financing is obtained via a 'mainstream' 3rd party lender, the lender's policies for dealing with 'unsatisfied' mortgage loan conditions on the part of the buyer are published and regulated ( especially in regard to notice of foreclosure, actual foreclosure and eviction, post-foreclosure return of equity to the former buyer, etc. ).

    However, in a 'contract for deed' situation, the seller is more or less free to establish any policies they like for dealing with 'unsatisfied' contract terms on the part of the tenant / buyer ... which can leave the tenant / buyer at a major disadvantage should future difficulties result in an inability to 'satisfy' every contract term. Legally speaking, when a 3rd party lender's mortgage is involved, the seller relinquishes title to the property at the time of closing, with the 3rd party lender retaining the property title until the mortgage terms have been satisfied by the buyer. But with a 'contract for deed' situation, the landlord / seller typically retains title to the property until the tenant / buyer has completely satisfied all contract terms ... which leaves the tenant / buyer far more vulnerable to potential eviction, potential non-return of equity, etc., if contract terms are 'unsatisfied' !!!


    If the seller can do that, the seller can give a Deed and take a Deed of Trust
    The landlord / seller COULD do this, but doesn't necessarily HAVE to do this. And doing so would obviously increase the overall 'loss risk' ( loss of rent / 'mortgage' payments, legal fees, delays evicting a non-performing tenant / buyer who is in possession of the property deed, etc. ) to the landlord / seller if the tenant / buyer 'defaults' on their contract obligations.

    Most landlords / sellers who choose to give up the 'certainty' of a 3rd party mortgage lender sale ( i.e. immediate payment in full to the seller by the 3rd party mortgage lender at the time of closing ) are not doing so out of the 'goodness of their heart', but do so on the basis of being able to charge comparatively high de-facto interest rates to the tenant / buyer while still retaining virtual full control of their property for the entire term of the contract. Or, put bluntly, nothing would make a landlord / seller happier than to collect 10 years worth of combined rent + 'equity' monthly payments from a tenant / buyer, have the tenant / buyer 'default' on the terms of their 'contract for deed', evicting the tenant / buyer, retaining the 10 years worth of monthly 'equity' payments ( over and above the fair price of 'rent' alone ), and then renting the same property to a new tenant or entering into a new 'contract for deed' with a new tenant / buyer.


    Yup. I would never go for it but it's popular with some people
    Indeed ... primarily because the tenant / buyer is able to bypass the normal regulatory requirements of a 3rd party lender financed mortgage i.e. income verification, tax history, money history, etc. ... plus is also able to bypass the normal procedural requirements of a 3rd party lender financed mortgage i.e. mortgage insurance, sizeable down payment, etc. However, as always, there's no such thing as a 'free lunch' ... i.e. 'contract for deed' tenants / buyers typically face higher de-facto total monthly costs ( = higher de-facto interest rate being charged by the landlord / seller ), as well as significantly higher risk of losing their equity if, for whatever reason, they are unable to fulfill the landlord / seller's contract terms at some future point.
    Last edited by Melonie; 02-24-2015 at 01:41 AM.

  31. #25
    God/dess
    Joined
    Oct 2005
    Posts
    6,947
    Thanks
    2,845
    Thanked 5,526 Times in 3,113 Posts
    My Mood
    Angelic

    Default Re: Paying for a house with cash

    Under a contract for deed the buyer has no protection from the sellers judgment creditors. Anyone with a judgment against the seller could execute on the property.

Page 1 of 2 12 LastLast

Similar Threads

  1. Paying the House / Dancer Compensation
    By yyyrrrrtt in forum Stripping (was Stripping General)
    Replies: 33
    Last Post: 04-30-2011, 10:58 PM
  2. MFirefighters let mans house burn for not paying fee
    By Michele.2 in forum The Lounge
    Replies: 22
    Last Post: 10-05-2010, 08:35 PM
  3. Police find $206 mln drug cash in Mexican house
    By lethalsoul in forum The Lounge
    Replies: 19
    Last Post: 03-18-2007, 02:42 AM
  4. paying off student loan debt vs. buying a house
    By mina loy in forum Dollar Den
    Replies: 25
    Last Post: 09-18-2006, 02:09 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •