Things To Consider When Buying A Home With Cash

The state of New York and New York City continue to be very strong real estate markets. This can lead to buyers making more aggressive offers to help them stand out in a wide field of other potential buyers. One such result is people making cash offers on homes. 

Because paying with cash will not require the need to undergo a lengthy mortgage approval process, the time it takes to close on the home will be significantly shorter. 

If you are an individual looking to buy a home or are looking to invest your money into property to rent to tenants, here are some things to consider if you are going to pay with cash.


When you offer cash, you stand out. Anyone else who is planning on financing their home will be making offers that are contingent on their mortgage being approved. Depending on the market, some buyers will prefer to accept a cash offer even if it is lower than financed offers.

Although they are minimal when being compared to costs of a home or property, there will also be no additional closing costs or lender fees. This still equates to thousands of dollars that you will not need to spend. 

For those who are looking to invest in property, the lack of an interest payment could be ideal. If you purchase a building for $500,000 at 4% interest with a 30-year mortgage, then you will pay more than $350,000 in interest over the lifetime of the loan. 

Lastly, when you pay with cash, you own whatever type of property it is that you’re buying—not the bank. 

Reasons To Finance

One of the things you should consider when deciding whether to finance or use cash is how much of your money you are willing to not have access to.  Additionally, given the historically low interest rates, you should do a financial analysis of whether or not your cash is better served earning you returns, when the presumed rate of return could be significantly higher than the interest rate on your loan.

If you use cash, you will not get any of that money back until you sell that home or property to someone else. Should the market take a turn for the worse and you need to get money out of the home, you will either be forced to sell at a loss or you will have to wait until the market improves in your favor.

There are other ways to get money out of the home such as a home equity line of credit (HELOC), a mortgage, or a home equity loan. The downside to these options is the amount of time it will take for these to go through.

So, recall the original question being asked and decide if you are comfortable having that much money tied up into real estate. 

Ultimately, the decision on whether to use cash or finance your future real estate transactions is up to you and your circumstances. However, you now know some of the right questions to ask before moving forward.

Drucker & Mattia PLLC

Buying and selling property are some of the most significant investments of your life. The attorneys at Drucker & Mattia possess extensive real estate experience and understand the unique market in and around New York City. Whether you are about to purchase a new home for your family or are looking to invest in another investment property, Drucker & Mattia will be there to protect you and your interests. Contact us online or call us at 718-458-2312 to schedule a consultation.

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When you’re facing legal issues or pursuing a lawsuit, skilled legal counsel makes a big difference. At Drucker & Mattia, PLLC, we specialize in a wide range of legal areas to meet the needs of a diverse client base.

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