THIL_PileOfCashSome people dream of having a big pile of cash so they could go out and purchase income properties without all the hassles and red tape. But there are perils that come along with this dream! Some of those “hassles” can sometimes keep people out of a bad situation.

For example, no financing means no inspection required. No heart pounding wait for the inspection report. No nail biting interlude while you wait for your lender to drop the hammer and refuse funding on a house that’s less than perfect (even though you knew that from the beginning). However, we recently performed and inspection on a house that had been purchased as a flip. The seller paid cash. The inside was very well done. It takes a lot for a flip to impress Rob and I but this house did it… until Rob got on the roof.

THIL_DisappointedIt was completely hailed out. And in this area, a new roof for a house that size would cost between $6,000 and $8,000. And that wasn’t all. We had to say the words so many Realtors hate to hear, “Federal Pacific electrical panel”. These electrical panels have been known to have breakers that don’t trip when they should which can lead to fires. Also, some home owner’s insurance companies have refused to cover homes with these panels. Something for you house hunters to keep in mind. So, the seller may have saved a few hundred dollars on an inspection, but in the end, it cost her thousands. It made me wonder if she ended up making any money at all.

Which brings me to another thing not required when buying with cash: Insurance. I’ll keep this simple: Don’t be a fool!! Get the insurance!!

Another service that is required for financing is an appraisal. This may be the one slightly less dreaded process than the home inspection. While you may think it would be a dream to be able to forgo that little piece of heaven, let me try to convince you otherwise. An appraisal is a real estate professional’s opinion of whether or not the house you want to buy is worth what you’re paying for it. Is that REALLY information you want to turn down?!

A friend of mine was in the last stages of her home buying process when the appraisal came back over ten thousand dollars below the sales price. When you think about how much more that would have cost them with interest over 15 years, that is a load of cash my friend!THIL_Shocked

I won’t lie, the hurdles people have to clear when they finance a home are no fun! There is red tape and a bazillion places to sign and stress and pressure… Wait, I’m hoping you’ll BUY a house, right? Maybe I should shut up. But no! I’m going to tell you the truth. There are parts of the system that are frustrating. Sometimes infuriating. But some of the criteria are so, at the end of the day, everyone has a good investment. Remember, until you pay off your mortgage, you and the bank own your property, and the bank has to protect it’s investment.  Some of that protection will end up protecting you, too.THIL_Protection

I would love to hear your take on this or any related subject. Feel free to comment below or email me your comments or home inspection questions to .Please also do me the honor of remembering to Pin, Like, Share or Tweet this article. The social media buttons are around here somewhere… Oh! They’re at the bottom of the article. Thanks again and I wish you a safe and happy home!

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