Home Buying in Almaden>Question Details

Jawahar, Home Buyer in Almaden, San Jose, CA

how common is it for a person to buy a home with a fuul (100%) down payment?

Asked by Jawahar, Almaden, San Jose, CA Mon May 17, 2010

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If you're talking about buying for all cash--a 100% down payment would mean all the payment, thus no mortgage--it's not too common, but it's done. Especially with less expensive properties. It's also a very good technique to use when buying: Your offer is much stronger and you can usually negotiate a lower price. Also, I've seen plenty of instances in which a lower all-cash offer has been accepted over a higher offer that required financing.

Check with your accountant or financial planner before doing it, though. The main thing you might be concerned about is tying up all that cash in a property. If you have plenty of extra cash, that's fine. But you don't want to end up having poured every penny into the property.

Hope that helps.
0 votes Thank Flag Link Mon May 17, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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Usually you want to put a down payment down so that you have equity in your home and can get a lower monthly mortgage payment if you can, but many people can't.

Here is a great video that talks all about down payments...
https://www.youtube.com/watch?v=zrknTzBvcS0
0 votes Thank Flag Link Sat Apr 12, 2014
It makes an ever lasting impression on seller force seller to quickly to decide to accept the strong offers. It also implies the buyer will quickly put the said deposit into the bank with no recourse.

I have seen 10-100% down as short as 24 hour to be deposited and very quick closing. There is no loan so the inspection is the contingency. Often they have released that contingency as well. The most bizarre one was 24 hour escrow. It was instantly rejected as unreal and too low($). The substitute for all cash is no loan contingency meaning the seller can keep your deposit if you can not get funding.
0 votes Thank Flag Link Sat Apr 12, 2014
Jawahar right now I have 2 all cash buyers for Almaden. It's not too rare at all.

Many home buyers mistakenly think that if they buy "all cash", it's so unusual and so amazing that they can get a deep discount on the sales price of the home. This really isn't the case - most sellers would happily wait 30 days to get much more money.

An all cash offer is preferable, though, as it means less risk to the seller. For the lighter risk, the reward is often a small discount of a couple of percent. The risk-reward ratio won't get you a 5% or 10% discount, though. Just had 4 offers on a listing of mine in Cambrian and the one all cash offer was the lowest in the barrell. Amazingly, that person had a real estate license - and should have known better!

I did a blog post on buying "all cash" awhile ago and will post the link below. I think you will find it very helpful.
0 votes Thank Flag Link Tue May 24, 2011
I have had many cash buyers in the past couple of years. Many second / vacation home buyers in my area pay cash for condominiums.
0 votes Thank Flag Link Sun Sep 26, 2010
Hi Jawahar

Most low priced REOs or Short sales in the valley are being pursued that way.
The seller and the bank then does have to wait for a long closing cycle of 30 days and close in
5 days or ten at best.

Also in the event of a short sale, the lender does not have to worry about the Aappraisal.

Best regards
Peryry
Web Reference: http://www.ruhandperry.com
0 votes Thank Flag Link Sun Sep 26, 2010
Depending on the price of the home, rare. Like so rare when you poke your steak it moos rare. If the home is in the $40-50k range, it's always possible that someone has the cash reserves to just go ahead and buy it outright, but most people aren't in this position and will finance instead of paying all cash. And when you factor in many areas you can't even buy a decent vacant lot for $40-50k, the likelihood diminshes even further.
0 votes Thank Flag Link Mon May 24, 2010
Hi Jawahar:

You should have no issue buying a home with all cash down, it is common in the valley as
some buyers are bringing cash from sale of stock or business or previous home.

Jawahar, however it is very difficult to unlikely to be able to get a 100% loan in Almaden Valley.

Give me a call at 408-656-5343 to discuss further.

Thanks
Perry Mistry
Web Reference: http://www.ruthandperry.com
0 votes Thank Flag Link Mon May 24, 2010
There are several programs that allow 100% financing on purchasing properties, but the problem is that most sellers today do not take this seriously.

Unless the property has been on the market for a really long time and the seller is willing to risk waiting / escrow falling out or your offering him an exceptionally good deal. Other than that only Veteran loans (VA) are typically accepted as offers with 100% financing.

Coming from a listing agent.

Max Boyko
(916) 470-3198
RE/MAX Gold
0 votes Thank Flag Link Tue May 18, 2010
Hello Jawahar, are you asking how common it is for someone to buy a home with 100% financing (no down payment) or how common it is for a person to buy a home paying cash (no mortgage - 100% down payment up front)??
0 votes Thank Flag Link Tue May 18, 2010
In todays market the only two programs i know of that will do 100% financing (no money down) is VA and then teh USDA rural home loan program. USDA is currently out of money, but a bill is in congress now waiting for it to be refunded. You also have fha which is only 3.5% down. The days of no money down loans other than is over for a while. You should meet with a local and trusted mortgage broker who can prequailify you at no cost and let youknow if there are any programs you do quailify for and what the costs, down payments and interest rates are.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon May 17, 2010
In that case, the buyer would purchase the property all cash, and there are lots of buyers (mostly investors) making all-cash offers.
0 votes Thank Flag Link Mon May 17, 2010
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