How to Pay Cash for a House From an Owner

Pay cash for a better deal.

Buying a house with cash is usually a sure way to get a good deal. An all cash offer from a buyer implies a quick sale, without the possibility of a deal falling apart because the buyer fails to secure financing. Thus, the seller is often willing to sell for a lower price or to accept concessions such as repair or decorating allowances. The transaction can be completed with or without the aid of real estate professionals; however, buyers uncomfortable with do-it-yourself legal and financial transactions should use professional real estate agents, appraisers and closing attorneys.

Instructions

1. Contact the real estate agent listing the house or the owner if it is "For Sale By Owner" to inform her of you desire to view the house. If you are using a buyer's agent, he will contact the appropriate party for you.

2. Prepare a contract outlining the price you are willing to pay, earnest money offered, concessions desired and a date, time and place for completing the transaction. You should also inform the seller that you are paying cash and provide her with a letter from your bank stating that you have on deposit the requisite funds to complete the purchase.

3. Perform a title search at the courthouse in the county where the property is located. You should search the property's ownership history for the past fifty years to make sure there are no unpaid liens against the property and that the seller is legally able to sell the property. Even if you are working without an agent, you should hire a professional title examiner and purchase title insurance from a title agency to assure clear title. A good closing attorney can handle the title examination and insurance.

4. Prepare a deed to transfer ownership. The deed should list the seller (grantor) and buyer (grantee), address and legal description of the property. Give a copy of the deed to the seller and file the original at the county courthouse to be recorded. Keep the recorded original for your records. Filing is another step where an attorney is invaluable.

5. Meet with the seller to sign the transfer deed. A notary public must be present to witness and notarize the transfer. Present seller with a certified check for the agreed upon sales price minus the seller's prorated portion of property taxes, city sanitation fees, commissions, etc.

6. Get the keys to your new house from the seller.

Tips & Warnings

• Real estate professionals, while not required, make this transaction infinitely smoother.

• A professional appraisal gives the current market value of a property and protects you from overpaying.

• Cash is king. Try to negotiate a lower price when buying with cash.

• Depending on your financial situation, it may be better to finance despite your having the cash needed to purchase a house.

• Some states require a property survey. Some don't. They are never a bad idea.