You save the realtor/bank fees so less.
If you want to see how much you save by paying cash vs. financing, get any amortization calculator and plug in the numbers. You will still have to pay some fees, which the title company will be happy to share with you. But at least here, the seller pays both his agent and the buyer's agent out of the sale price. Again, here in Texas, that is normally 3% of the sale price to each agent, from the seller, not the buyer.How much percent more typically is it to buy a home, but not to go for a mortgage on it (basically full price)?
Yeah, I edited the realtor part. Seller should pay that. Would save the 1% origination fee at the bank. Definitely have attorney costs, title search/insurance, maybe survey/inspection. YMMVBuying cash doesn't necessarily negate realtor fees. If there's a selling agent you'd still pay that. If you used a buyers agent you'd still pay that. There's still likely some title and attorney costs as well that may end up being close to what a bank would charge for their closing/processing fees. (Several hundred to a grand or two)
When you say the "seller pays the realtor cost". Sure.
But if a house is listed with a realtor that price is baked in already. While true, as a buyer you aren't technically paying the realtor out of pocket. But it's kind of like saying you aren't paying the kid flipping your burger at McDonalds directly either. It's baked into the price of the burger.
Friend put his townhouse on fb marketplace to avoid the realtor 6%. The boss says let's go look. She said we'd take it, he saved the 6% and I got a fair price. Happy all around.Yes and no. Regardless the home is going to sell for market price there are zero scenarios where someone says “let’s avoid realtors and I’ll sell you the house for $16k less”
People like to read about that stuff but it never happens outside of family transaction or family estate sales.
Friend put his townhouse on fb marketplace to avoid the realtor 6%. The boss says let's go look. She said we'd take it, he saved the 6% and I got a fair price. Happy all around.
I was the buyer. I didn't save any $ but the price was fair. A realtor isn't going to look out for me. The lawyer took care of the title search/insurance so I was covered. If I had a crystal ball, I would have bought one more that came up soon after.But did the buying friend save any money? What risk did the buying friend take purchasing that property without representation?
I know someone that did that with a house being sold by a co-worker. Seller didn't like realtors/dealing with realtors (but is married to a realtor )Yes and no. Regardless the home is going to sell for market price there are zero scenarios where someone says “let’s avoid realtors and I’ll sell you the house for $16k less”
People like to read about that stuff but it never happens outside of family transaction or family estate sales.
Children of realtors are the equivalent of hellspawn.I know someone that did that with a house being sold by a co-worker. Seller didn't like realtors/dealing with realtors (but is married to a realtor )
Why is this the case w/ realtors vs other professions? seriously asking and am curious to why you think this.Children of realtors are the equivalent of hellspawn.
It's been 21 years but I paid cash because my banker backed out at the last moment for the "for sure" mortgage I'd lined up. There wasn't a realtor involved. Well, there was, sort of, because the owner of the house (which I was living in, paying rent, like the other people in the house) had the property managed by a married couple, both of whom were realtors. They lined up someone to come look at the place when the owner went to sell. That person didn't show up (AFAIK), but I stepped up and asked what the owner wanted, a price was quoted and I eventually came up with the cash and that was it. I had to pay title fee, inspection fee (because I needed inspection for the mortgage), maybe some other stuff I'm forgetting. The house was in escrow. I suppose the realtor/manager got something but it was from the owner, not me.Buying cash doesn't necessarily negate realtor fees. If there's a selling agent you'd still pay that. If you used a buyers agent you'd still pay that. There's still likely some title and attorney costs as well that may end up being close to what a bank would charge for their closing/processing fees. (Several hundred to a grand or two)
In this market, buying cash just basically moves you to the front of the line since you aren't dealing with any contingencies or waiting for approvals. The only way you'd really save is if you approached the seller ahead of listing it and had an agreement outside of realtors.
That's just it. The advantage of buying outright is NO INTEREST! You own outright. You have your expenses, property taxes, insurance, upkeep, repairs, responsibilities, all that stuff, but no payments and no interest.You save a shit ton in interest, right?
I'm not super knowledgeable about the specifics of home loans but my first mortgage payment was like $1000 (property taxes/insurance have since raised it to over $1200). Its a 30 year loan.
The $1000 was split approx. (iirc):
$400 interest
$250 principle
$300 taxes
$50 insurance (my homeowners insurance has doubled btw)
As you get further into the loan the items get down and the principle goes up. So if the interest averages out to $200 a month over 30 years that's 72 fracking grand.
Again - I could be wrong about how the numbers work exactly.
Oh yeah, I should also mention for people that can get a VA loan, NBKC doesn't charge an origination fee for VA loans, and has very competitive rates. I couldn't get anyone else to match thatYeah, I edited the realtor part. Seller should pay that. Would save the 1% origination fee at the bank. Definitely have attorney costs, title search/insurance, maybe survey/inspection. YMMV
There are a lot of factors to consider.
Let's keep the numbers simple and say a person has $100,000 to spend and that is a large percentage of their net worth. They will either
1) put down $20,000 and finance $80000
or
2) pay for the house in cash
If they pay in cash they'll save a ton in interest right off the bat and not have a mortgage payment. But $80,000 put in an index fund with an average return of 8% over thirty years is over $800,000 with no additional contributions.
This person can also invest the amount they would have paid towards a mortgage every month. But so few people end up actually doing that.