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"&amp;lt;p&amp;gt;&amp;lt;strong&amp;gt;Question: &amp;lt;/strong&amp;gt;What are the Benefits to Paying Cash for a Home?&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;A reader asks: &amp;lt;em&amp;gt;&amp;amp;#34;Is it true that cash is king? We aren&amp;amp;#39;t bragging or anything, but my wife and I have saved enough money to pay all cash for a home. We know we might get a better rate of return in the stock market, but with prices the way they are in Los Angeles, we believe that a seller might give us a break on price if we pay cash. What are the benefits to paying cash for a home?&amp;amp;#34;&amp;lt;/em&amp;gt;&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;&amp;lt;strong&amp;gt;Answer: &amp;lt;/strong&amp;gt;Good for you for setting aside money to &amp;lt;a href=&amp;quot;https://www.thebalance.com/eight-reasons-to-buy-a-home-1798233&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;1&amp;quot;&amp;gt;buy a house&amp;lt;/a&amp;gt;. Very few buyers are disciplined enough to save enough to pay cash for a house, much less a home in California. Prices are astronomical here as compared to the rest of the country.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;Depending on the &amp;lt;a href=&amp;quot;https://www.thebalance.com/hot-cold-and-neutral-real-estate-markets-1798785&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;2&amp;quot;&amp;gt;temperature of the marketplace&amp;lt;/a&amp;gt;, paying cash has its benefits from a seller&amp;amp;#39;s point of view. Now, some experts might argue that it&amp;amp;#39;s always cash in the end, and it is. But getting to the &amp;amp;#34;end&amp;amp;#34; prevents some buyers who are using financing from getting there.&amp;lt;/p&amp;gt;&amp;lt;h3&amp;gt;Reasons Why Sellers Like All Cash Offers&amp;lt;/h3&amp;gt;&amp;lt;p&amp;gt;Sellers will often accept an all-cash &amp;lt;a href=&amp;quot;https://www.thebalance.com/are-you-ready-to-make-a-purchase-offer-1798838&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;3&amp;quot;&amp;gt;purchase offer&amp;lt;/a&amp;gt; over a higher priced offer with conventional or &amp;lt;a href=&amp;quot;https://www.thebalance.com/reasons-we-love-fha-loans-1798427&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;4&amp;quot;&amp;gt;FHA loan&amp;lt;/a&amp;gt; financing. That&amp;amp;#39;s because they know the cash offer is more likely to close. It involves fewer stumbling blocks. And sometimes a bird in the hand is worth two in the bush, so to speak.&amp;lt;/p&amp;gt;&amp;lt;ul&amp;gt;&amp;lt;li&amp;gt;&amp;lt;strong&amp;gt;No Appraisal Contingency.&amp;lt;/strong&amp;gt;&amp;lt;p&amp;gt;&amp;lt;a href=&amp;quot;https://www.thebalance.com/appraisal-fees-315707&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;5&amp;quot;&amp;gt;Appraisals&amp;lt;/a&amp;gt; are like . . . no, I&amp;amp;#39;m not going to repeat that colloquialism, but everybody has an opinion. Appraisals are not cast in gold. The most common method is reliance on &amp;lt;a href=&amp;quot;https://www.thebalance.com/cma-comparative-market-analysis-1799036&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;6&amp;quot;&amp;gt;comparable sales&amp;lt;/a&amp;gt;, known as the comparative method, which involves choosing 3 properties and comparing those values to the property in question, adjusting upward or downward for updates / missing features.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;If a home does not appraise for the purchase price and the buyer is &amp;lt;a data-inlink=&amp;quot;l0eeCApcrbdBoOP3uIrHbQ&amp;amp;#61;&amp;amp;#61;&amp;quot; href=&amp;quot;https://www.thebalance.com/loan-approval-mistakes-home-buyers-make-1798386&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;7&amp;quot;&amp;gt;obtaining a loan&amp;lt;/a&amp;gt; that requires a 20% down payment or less, the lender will not lend unless the buyer coughs up more cash or the seller discounts the price. There are other options for dealing with a &amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-deal-with-a-low-appraisal-1798414&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;8&amp;quot;&amp;gt;low appraisal&amp;lt;/a&amp;gt;, but they can also spell &amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-cancel-a-purchase-contract-1798845&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;9&amp;quot;&amp;gt;contract cancellation&amp;lt;/a&amp;gt;.&amp;lt;/p&amp;gt;&amp;lt;/li&amp;gt;&amp;lt;li&amp;gt;&amp;lt;strong&amp;gt;No &amp;lt;a data-inlink=&amp;quot;oXr87YTZIHJHXSk6_Q5q1w&amp;amp;#61;&amp;amp;#61;&amp;quot; href=&amp;quot;https://www.thebalance.com/how-to-use-a-loan-contingency-when-buying-a-home-1798400&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;10&amp;quot;&amp;gt;Loan Funding Contingency&amp;lt;/a&amp;gt;.&amp;lt;/strong&amp;gt;&amp;lt;p&amp;gt;Even though a buyer may be fully qualified to buy a home at inception, a hundred things can come up during the loan process. Apart from the home itself not qualifying, to conditions for loan approval that a buyer cannot meet, to loans that were once available drying up during escrow.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;More commonly, lenders deny &amp;lt;a data-inlink=&amp;quot;T-6WNFBAnc8F2PdKFJGdkQ&amp;amp;#61;&amp;amp;#61;&amp;quot; href=&amp;quot;https://www.thebalance.com/how-first-time-home-buyer-loans-work-315674&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;11&amp;quot;&amp;gt;loans because the buyers&amp;amp;#39;&amp;lt;/a&amp;gt; qualifications change upon further scrutiny. Maybe the buyer wasn&amp;amp;#39;t fully employed in the same occupation for the past two years, perhaps financial situations were altered prior to closing such as the buyer purchasing a new car or worse, maybe the buyer was unwittingly a victim of &amp;lt;a href=&amp;quot;https://www.thebalance.com/how-identity-thieves-use-your-mail-to-profit-4065580&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;12&amp;quot;&amp;gt;identity theft&amp;lt;/a&amp;gt;.&amp;lt;/p&amp;gt;&amp;lt;/li&amp;gt;&amp;lt;li&amp;gt;&amp;lt;strong&amp;gt;Faster Closing.&amp;lt;/strong&amp;gt;&amp;lt;p&amp;gt;A buyer does not need 30 or 45 days to close if the buyer is not obtaining a loan. Once the &amp;lt;a href=&amp;quot;https://www.thebalance.com/checklist-for-home-inspections-1798682&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;13&amp;quot;&amp;gt;home inspection&amp;lt;/a&amp;gt; and other &amp;lt;a href=&amp;quot;https://www.thebalance.com/crucial-types-of-contract-contingencies-for-home-buyers-1798291&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;14&amp;quot;&amp;gt;contingencies&amp;lt;/a&amp;gt; have been satisfied or released, closing can take place in as little as seven days, providing the buyer is willing to sign a &amp;lt;a href=&amp;quot;https://www.thebalance.com/lead-paint-disclosures-and-facts-1797789&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;15&amp;quot;&amp;gt;lead paint&amp;lt;/a&amp;gt; waiver.&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;A faster closing puts money into the seller&amp;amp;#39;s pocket sooner. There are also fewer things that can go wrong &amp;lt;a data-inlink=&amp;quot;dPaTtrAtzVCXnSq4nF7x3g&amp;amp;#61;&amp;amp;#61;&amp;quot; href=&amp;quot;https://www.thebalance.com/what-is-escrow-315826&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;16&amp;quot;&amp;gt;in a short escrow period&amp;lt;/a&amp;gt;.&amp;lt;/p&amp;gt;&amp;lt;/li&amp;gt;&amp;lt;/ul&amp;gt;&amp;lt;h3&amp;gt;Benefits to Buyers to Pay Cash for a Home&amp;lt;/h3&amp;gt;&amp;lt;p&amp;gt;When &amp;lt;a href=&amp;quot;https://www.thebalance.com/winning-reo-foreclosure-offers-1798483&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;17&amp;quot;&amp;gt;REO&amp;lt;/a&amp;gt; lenders have a lot of &amp;lt;a href=&amp;quot;https://www.thebalance.com/how-to-find-foreclosures-and-government-seized-homes-1798182&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;18&amp;quot;&amp;gt;foreclosures&amp;lt;/a&amp;gt; in their portfolios, sometimes the lender will discount the list price of the home in hopes the property will attract &amp;lt;a href=&amp;quot;https://www.thebalance.com/multiple-offers-competing-home-offers-1798836&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;19&amp;quot;&amp;gt;multiple offers&amp;lt;/a&amp;gt;. Buyers who pay cash for &amp;lt;a data-inlink=&amp;quot;LnkDsolq8aQAVGvtt0vFJQ&amp;amp;#61;&amp;amp;#61;&amp;quot; href=&amp;quot;https://www.thebalance.com/why-you-can-t-buy-that-bank-repo-home-1798472&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;20&amp;quot;&amp;gt;REO homes&amp;lt;/a&amp;gt; tend to win &amp;lt;a href=&amp;quot;https://www.thebalance.com/how-can-two-offers-on-a-listing-happen-at-the-same-time-1798822&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;21&amp;quot;&amp;gt;multiple offer situations&amp;lt;/a&amp;gt;. But there are other benefits for buyers over price alone:&amp;lt;/p&amp;gt;&amp;lt;ul&amp;gt;&amp;lt;li&amp;gt;No mortgage payment&amp;lt;/li&amp;gt;&amp;lt;li&amp;gt;Sense of security&amp;lt;/li&amp;gt;&amp;lt;li&amp;gt;Available &amp;lt;a href=&amp;quot;https://www.thebalance.com/definition-of-equity-1798546&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;22&amp;quot;&amp;gt;equity&amp;lt;/a&amp;gt; in the event of a financial emergency&amp;lt;/li&amp;gt;&amp;lt;li&amp;gt;Market fluctuations do not matter&amp;lt;/li&amp;gt;&amp;lt;li&amp;gt;No restrictions on &amp;lt;a href=&amp;quot;https://www.thebalance.com/property-deeds-warranty-grant-and-quitclaim-1799225&amp;quot; data-component=&amp;quot;link&amp;quot; data-source=&amp;quot;inlineLink&amp;quot; data-type=&amp;quot;internalLink&amp;quot; data-ordinal=&amp;quot;23&amp;quot;&amp;gt;title transfer&amp;lt;/a&amp;gt; due to underlying loan&amp;lt;/li&amp;gt;&amp;lt;/ul&amp;gt;&amp;lt;p&amp;gt;&amp;lt;em&amp;gt;At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.&amp;lt;/em&amp;gt;&amp;lt;/p&amp;gt;"^^<http://www.w3.org/2001/XMLSchema#string>
<https://www.thebalance.com/what-are-the-benefits-to-paying-cash-for-a-home-1798721>