Owning a home has always been considered a great investment. Nowadays, many buyers are choosing to buy real estate for cash, thanks to low prices, a huge inventory of foreclosed properties, and poor rates of return on other types of investments. Although the only legal requirement for a cash purchase is the money, there are several important considerations for a cash buyer:
- Home Inspection - never buy without one
- Appraisal - there is no lender appraisal, so this is the only way to insure that the purchase price is reasonable
- Survey - always recommended for small lots and properties in older or urban areas
- Flood Zone Determination - a lender always checks this, and a buyer should also
- Hazard Insurance - always have the property bound with insurance from the closing date (do not put this off)
- Termite Inspection - a termite problem can be a major expense
- Water Bills - look at recent water bills to make sure they are not unreasonably high - this could reveal a leaky or broken pipe
- HOA Dues or Condo Dues - inquire about pending assessments or increases in dues - check the foreclosure rates, owner/occupancy rates, and financial stability of the complex and association. Due diligence is most important here!
- Owner's Title Insurance - this is imperative for the cash buyer, especially when buying a foreclosed or distressed property such as a short sale
If you are fortunate enough to purchase real estate without a mortgage loan, be sure to secure your investment by following these guidelines.