Buying with Cash

According to a recent article in The Oakland Press, while investors drove up home sales 3.7% last month, purchasing by first-time home buyers fell. This isn’t exactly great news. The National Association of Realtors also released information that home purchases made completely in cash made up a whopping 35% of all purchases, the highest it’s seen since the association began tracking that number.
So why are so many people buying with cash? The answer could be the hit that many peoples’ credit took during the recent financial meltdown, making it difficult to get a loan. Banks have also been tightening lending requirements, which exacerbates the situation. For many, the tax benefits of buying with a mortgage don’t measure up to those you can get from buying with cash—if you pay with cash, you have complete ownership of your home up-front, and also don’t have to worry about mortgage interest. Also, many sellers will favor a buyer who can have the payment upfront, instead of waiting on the process of financing the purchase and the risk that it may not come through.
But, this payment method isn’t for everyone. Who’s paying for a house all in cash? While many of them are people with lots and lots of it at their disposal—domestic and foreign investors, for example—it is possible for others to do the same. With lots of work, planning, sacrifice, and smart saving, it’s possible to amass the cash needed; even if it’s only for a down payment at a small percentage of the price, it can make all the difference.