Purchasing a property cash.

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N@t3

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Good day MYBB members,

I am in the process of purchasing a property in cash (EFT). Property value in region on 800K to 1mil. I have been saving extensively and half way there to reach my goal and date set at middle of next year.

My question is, are there any un-expected or hidden costs one would need to look at, bearing in mind this is my first time.

Thank you in advance for the answers and banter.
 
Also, the bond typically adds red tape that can affect closing time, and risk to the seller (bond not approved means deal is dead (as typically written in the contract of course)), which weakens one’s negotiating position.
 
Speedster said:
Why? Registering a bond is expensive. If he needs the cash later in life he can always register a bond then
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Say 10000 or so.

And yes it adds some red tape but removes other bits if you are thinking of buying a property for cash.
 
Speedster said:
Why? Registering a bond is expensive. If he needs the cash later in life he can always register a bond then
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You have to do the title deeds in anycase so visiting the attorneys once off for everything.
 
cguy said:
Also, the bond typically adds red tape that can affect closing time, and risk to the seller (bond not approved means deal is dead (as typically written in the contract of course)), which weakens one’s negotiating position.
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If you have cash to buy the property there's no chance of not having a bond approved.

Bonds get declined because of affordability issues with the buyer.
 
rietrot said:
If you have cash to buy the property there's no chance of not having a bond approved.

Bonds get declined because of affordability issues with the buyer.
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Yes, but the seller doesn’t know you have the cash, so they perceive you as higher risk than a cash buyer.
 
rietrot said:
You have to do the title deeds in anycase so visiting the attorneys once off for everything.
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Bond attorney =/ transfer attorney
cguy said:
Yes, but the seller doesn’t know you have the cash, so they perceive you as higher risk than a cash buyer.
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Although I guess he doesn't have to make the bond a condition of the sale, so that for the seller it's effectively a cash offer. I'd still hold back on the bond application if I was the OP, until such time as I needed the extra funds.
 
The only reasons for a bond when you don't need one I can think of is to build a credit record if you don't have one or to keep access to the money for short term loans(if you own a business this is useful) otherwise just buy it cash and save the bucks.
 
Speedster said:
Although I guess he doesn't have to make the bond a condition of the sale, so that for the seller it's effectively a cash offer. I'd still hold back on the bond application if I was the OP, until such time as I needed the extra funds.
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Yeah, one could make it bonded, but failing that cash. I would say that as a seller that would still make me a bit nervous though.
 
cguy said:
Yeah, one could make it bonded, but failing that cash. I would say that as a seller that would still make me a bit nervous though.
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With cash deals they usually expect a decent chunk of it to be paid into the trust account pretty quickly and most of it well ahead of transfer time. People not getting approved for the loan they thought they could afford is just as much of a risk.
 
B-1 said:
With cash deals they usually expect a decent chunk of it to be paid into the trust account pretty quickly and most of it well ahead of transfer time. People not getting approved for the loan they thought they could afford is just as much of a risk.
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It’s much more of a risk (not getting approved for a loan), which was my original point. A straight cash offer is the least risk. A bond with cash backup is pretty atypical, and it creates some doubt as to whether the cash will ever materialize.
 
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I am also considering to buy my house cash before we reach 2030. My concern with taking a bond when you don't need to is you might end up upside down due to the interest being added to the balance.

I would think if you want to buy it cash do it from the begining if you don't then, dont shocked at the huge interest on that large loan you will take.
 
you might have to explain to SARS where you got the cash from
 
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