If I but a house with cash, do I still pay closing costs and whatever other costs are involved?

Asked by Laura, 33952 Thu Oct 18, 2007

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18
Isabella, Both Buyer And Seller, Florida
Thu Sep 1, 2011
Also, in response to those wondering why someone is buying cash. In this economy many people have had financial hardship and it could be they can not get a loan. Or it could just be they want the comfort of knowing that their HOME is theirs. And wow to you for even asking that! What is wrong with this, that someone would like to know that their home is free and clear... that is why they economy is so messed up... so many people owing more money than they have!
3 votes
Karen Selby, , 32223
Fri Oct 19, 2007
Not sure where you are buying, but in my area, closing costs are customarily split between buyer and seller. The key word is "customarily", because the who pays the costs may be negotiable. Check with your realtor as to the customary closing costs, and, as another responder suggested, maybe ask the seller to pick up all, or some of those costs.
2 votes
Elizabeth Bu…, Agent, Englewood, FL
Thu Oct 18, 2007
No, If you are buying with cash the seller pays Title , search and Doc related charges with the sale.
2 votes
Richard M. J…, , Sherman Oaks, CA
Thu Oct 18, 2007
Hi Laura, yes you would still need to get an escrow company involved and title insurance.
2 votes
No, you do not "need" a escrow company - you can pay your taxes and insurance yourself.
Flag Wed Jul 17, 2013
Paula Bean, , Orlando, FL
Thu Oct 18, 2007
good answers from all. If you are interested in what closing costs you don't pay if you pay cash, let me know and I can send you the info. It is calculated on the price of the house.

Just as an aside - WHY would you want to pay cash for a house?
By doing so, you get rid of your leverage, and you have no tax write of. why not put a good down pmt, then use the rest of the money to invest elsewhere and get the benefit of your tax write off and leverage?

You may be interested in getting a cash flow anaylsis - this will tell you why it may not be a good idea to pay cash, based on your tax bracket, age, etc.

Just a thought ;-)
Web Reference:  http://www.HomeOrlando.com
2 votes
With today's rates i would simply pay cash from a low-interest annuity, then take out a HELOC against the property and pay off all other debts/purchases.
Flag Sun Jan 12, 2014
Ute Ferdig, Agent, Auburn, CA
Thu Oct 18, 2007
Hello Laura. You still pay closing costs even when you pay cash. You only eliminate those costs that are associated with loans. Although you don't have to get title insurance when you don't finance the purchase through a loan, I would highly recommend it as not having title insurance can be costly and can also cause problems down the road when you want to sell as the property has not been continuously covered by title insurance.
Web Reference:  http://www.theMLShub.com
2 votes
pardsn2, Home Buyer, Port Charlotte, FL
Mon Jan 21, 2013
I would pay cash for a house because I would own it free and clear and the bank couldn't take it from me. BTW, crunch the numbers regarding the tax deduction...It doesn't make financial sense to pay $10,000 in interest per year to get a tax deduction of $1,300 (for example); that is if you have the money to pay cash for a house.
1 vote
Isabella, Both Buyer And Seller, Florida
Thu Sep 1, 2011
A title search is the responsibility of the SELLER. The seller must provide a free and clear title.
Title insurance is the buyers option if paying cash and no bank is involved as is Homeowners Insurance unless a condo and the HOA will require it. There will be recording fees and pro-rated taxes and HOA fees. It should be under $300.
1 vote
Elizabeth Bu…, Agent, Englewood, FL
Thu Oct 25, 2007
When you buy a house for cash you still have recording fees for the deed and also if in the contract the buyer is paying Title that would be a closing cost. If you as a buyer is not in the area for closing the closing agent will charge you for express mail as well. Hope this helps.
1 vote
Deborah Madey, Agent, Brick, NJ
Sun Oct 21, 2007
There are some differences about who pays what from one area to another. Also, exact fees for recording and taxes varry. You will still have closing costs, but only a local RE Pro can project what those fees would be for you.
1 vote
Richard M. J…, , Sherman Oaks, CA
Sun Oct 21, 2007
Hi Laura! Yes, there are fees including escrow, county fees, etc....
1 vote
Susan Gimore, , 34223
Sun Oct 21, 2007
You would pay recording fees for the deed and any title search, title policy charges. Who is closing this deal for you? If it's a title company or an attorney, they can answer this question with exact costs.
1 vote
Myke Atwater, Agent, Santa Rosa Beach, FL
Fri Oct 19, 2007
Certain costs need to be paid as part of a real estate transaction. There are recoridng fees, title search fees, etc.. This occurs whenever property is transferred. If you are paying cash, you of course will save the money you would have paid to the bank to do appraisal, origination fees, points, etc. If paying cash, you have a lot of leverage with the seller, because they don't have to be dependent on a bank to do their processing for funds to know if you qualify as a buyer. This is a great benefit for the seller, so you can negotiate what closing costs they are willing to pay. Make sure when the contract is written, that included in there is a statement in an addendum that seller "will pay $xxxx toward buyer closing costs" if that is what you want to do. A good realtor can guide you in the process.
Web Reference:  http://www.myketriebold.com
1 vote
rsrsample, Home Buyer, Edgewater, FL
Fri Sep 20, 2013
what is a dock stamp you pay at closing ? if you are paying cash for the house the full amount what does the buyer have to pay at closing?
0 votes
J R, , New York, NY
Sun Oct 21, 2007
Curious, what areas does the seller pay for title search?
0 votes
ian cockburn, Agent, New Orleans, LA
Thu Oct 18, 2007
You still have to pay for a title search, the insurance for the title, fees from an attorney, taxes and other such typical closing costs. Ask your agent to show you a typical HUD statement...this would help you understand closing costs a bit better.
Web Reference:  http://www.iansellsnola.com
0 votes
The Hagley G…, Agent, Pleasanton, CA
Thu Oct 18, 2007
Don't forget tat paying cash for a home and being to close escrow quickly carries a lot of weight. Why not ask for the seller to pay closing costs?\

Although...Paula has a great point. Why are you paying cash?
Web Reference:  http://www.cindihagley.com
0 votes
Because not everyone can qualify for a loan!
Flag Tue Nov 11, 2014
Jennifer De…, Agent, Orlando, FL
Thu Oct 18, 2007
Ute is right, additionally you can save yourself by not doing an inspection, appraisal or survey but I would suggest that you get these done anyways. I have seen many investors skip these steps only to pay for it later on down the road with an encroachment issue they didn't know about or problems in the home that could've been amended with a simple home inspection.
0 votes
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