I have about 750k in cash to buy a home for my family member.
Does paying for a house in cash have benefits?
Do we get the house sooner? Are they more likely to sell to us?
I know there is no difference from them getting 750k from the bank and 750k from us in cash but i thought I would ask.
etc?
Thanks!
Well there is a difference. Being a cash buyer means that there is one less hurdle in the sale. Plus it can be a big hurdle. You should get a discount, and you should be able to pick up distressed sales more easily. But the advantages are greater in a buyers market, and I don't think we are there yet.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
I have about 750k in cash to buy a home for my family member.
Does paying for a house in cash have benefits?
Do we get the house sooner? Are they more likely to sell to us?
I know there is no difference from them getting 750k from the bank and 750k from us in cash but i thought I would ask.
etc?
Thanks!
An interesting question.
My initial thought was that yes if you are an experienced buyer you can use the 'I'm a cash buyer" line to drive a better deal, but the downside is that if you are not an experienced buyer and you buy emotionally you just might get fleeced.
At least when you get a loan the bank do a valuation and often it's possible to either get a copy of the valuation or at least you could find out the amount.
I'm not suggesting that you borrow if you don't have to, but if you have any doubts then perhaps getting a valuer to do a valuation might be a good idea. You may still be happy to pay above the valuation, valuers are conservative but at least you won't be ripped off for $100K or so without being aware of it.
Best of luck whatever you choose to do.
Any expressed market opinion is my own and is not to be taken as financial advice
My initial thought was that yes if you are an experienced buyer you can use the 'I'm a cash buyer" line to drive a better deal, but the downside is that if you are not an experienced buyer and you buy emotionally you just might get fleeced.
At least when you get a loan the bank do a valuation and often it's possible to either get a copy of the valuation or at least you could find out the amount.
I'm not suggesting that you borrow if you don't have to, but if you have any doubts then perhaps getting a valuer to do a valuation might be a good idea. You may still be happy to pay above the valuation, valuers are conservative but at least you won't be ripped off for $100K or so without being aware of it.
Best of luck whatever you choose to do.
Don't tell the real estate agent how much you have. They will make sure you part with every penny of it.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
I'd be more inclined to invest your $750k elsewhere (perhaps a range of high yielding blue chip shares), and use the tax-advantaged dividends to pay off a loan for the house. That way you aren't the one paying for the home and you're not losing your $750k. In the event something goes wrong you can sell some shares, and are presumably also working.
Over time the shares dividends will easily exceed the cost of paying down the home loan and you can pay it down more quickly. At the end you'll have the shares (which will have grown), the dividend cash flow (which will have grown), the house (which should have increased in value), and it won't have cost you in terms of working income.
Just an alternate view, this approach won't be for everyone.
I don't know all the State laws but it may be an advantage if you can go unconditional on a contract if you have an offer accepted which you think is appropriate. I've done that in Queensland with an offer which was only accepted when I offered to go unconditional immediately. The buyer was tempted and the deal was done. The Queensland system allows the conttract to go unconditional immediately if the buyer has the cash. I couldn't do that in NSW when I bought with cash. The system there doesn't seem to allow it. But even there, convincing the seller that you have the cash may help the deal but you will have to wait for the formalities to be completed until the contract can go unconditional unless there is a way around it. There's a way around most obstacles. Don't know about the other States.
Anyone who has accumulated $750k in cash shouldn't require advice from a random forum. How do you amasse such wealth and have NFI??
$750k is not that much nowadays. It buys a decent house so it may be just the proceeds of a deceased estate (uncle or granny).
Web forums are actually pretty good sources of free advice but like any advice, get second and third opinions and don't let anyone talk you into anything you are unsure about.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
... accumulated $750k in cash ... How do you amasse such wealth ...
Work in the mines for a decade and don't piss it ALL up against the wall?
Recall a cute little chicky babe teller down the bank one day looking at my bank account and asking "Wow, how did you get all that? Trading shares???" "Hard work 'n saving" said me - At which point she appeared to become a bit disappointed and even disinterested in continuing the conversation ... LOL!
Anyway, to the OP, yep, I've found being a cash buyer can give some advantage - Omitting the finance clause can be rather tasty bait - Because a lot can't do that pretty obviously.
As to another comment here about the potential inadvisability of telling how much you have to spend, play it by ear maybe? As I recall a time when an agent was trying to up my offer and I simply said "It's a cash offer - I don't have any more cash to offer - Take it or leave it" - They took it.
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