Real Estate Advice
Does Cash Talk?
Dear Pat
We’ve been saving for some time to buy our first house, but a recent
inheritance will enable us to pay cash, if we choose. Our problem (if
you can call it that) is that we plan to continue working; since
payments wouldn’t be difficult, we can’t decide whether to pay cash
for a house or to put the money in an investment with a yield greater
than the 6.5% a mortgage would cost us. Generally speaking, could we
expect the discount we’d get by paying cash to offset the interest
write-off we’d get with a mortgage?
--Nice Choices
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Dear Choices,
Whew! Bear in mind that I am but a simple Realtor, and that your
“problem” requires the attention of a qualified investment
professional who can analyze your situation based on your ages,
income, lifestyle and financial goals. I would like to nibble on a
point you raise about the choice of cash versus an investment yielding
greater that 6.5%. It’s true that some buyers do choose to make a
smaller down payment in order to keep cash working for them in
higher-yield investments—but again, I urge anyone considering this
option to consult with financial professionals. And I want to bite
down hard on the notion that a cash buyer can expect a discount. Don’t
forget, it’s all cash to the seller on closing day—whether it comes
from the buyer’s checking account or their mortgage lender. |
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Pat
Rosaves is broker/owner of River Realty.
She has over 30 years experience helping
people with their real estate needs.
Questions may be sent to her at River
Realty, 2543 38th Ave S. Minneapolis, MN
55406. She can also be reached at
612-724-1314, or at www.riverrealty.net |
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