It’s a tempting scenario: having accumulated a considerable amount of cash, you find your St. Cloud dream house, agree that the asking price is within reason—and prepare to sit down to make an all-cash offer. By buying it outright with cash, the future looks like ultra-smooth sailing, financially speaking. No mortgage payment. No interest. No monthly insurance set-aside or property tax pre-payment impounded into some escrow account the mortgage company insists upon. And you really own the place yourself—with no strings attached!

Although there are undeniable plusses to buying your St. Cloud dream house with cash, there are at least three opposing reasons why it would be prudent to at least think twice before writing that all-cash offer:

1.      Diversification. Investment counselors never fail to preach the advantages of diversification. To the extent that buying your St. Cloud property with cash means you will be funneling the lion’s share of your liquid assets into a single investment, it limits your freedom to explore other avenues. If a business opportunity beckons, you might wind up borrowing against your home equity—in which case you could have saved the trouble (and extra expense) by taking a home loan in the first place.

2.      Leveraging your position. You needn’t make an all-cash offer for your solid bank balance to contribute to the way you will be viewed by lenders. The home loan terms you are offered should reflect your substantial financial standing. When lowered interest rates are offered, the financial consequences are worth factoring into the big picture.

3.      Taxes. The federal tax reform passed in 2017 may have limited the interest tax deduction to $10,000, but that’s still a five-figure lightening of the load come tax time—one which reduces a home loan’s bottom line cost.

Of course, there are also some considerable advantages to buying your St. Cloud home via an all-cash offer. Chief among them is the obvious: many St. Cloud sellers choose cash offers over competing bids that require lender approval. Whether you are looking to buy or sell, one aspect of what I offer clients is my professional experience in helping structure or evaluate offers to purchase. Call!   

Providing a superior level of informed, professional real estate services to buyers and sellers throughout Central Minnesota. We have agents specializing in residential, commercial, multifamily, new construction, existing, investment properties, foreclosures/REO, and short sales with offices located in:

Multiple Office Locations To Serve YOU!

Saint Cloud 320-259-4554

Princeton 320-983-3555

Sartell 320-259-4554

Little Falls 320-259-4554

Minneapolis 763-565-2000

Hutchinson 320-455-9127

Litchfield 320-298-1140

Premier Real Estate specializes in MANY areas around Central MN including Saint Cloud, Waite Park, Rice, Royalton, Sartell, Royalton, Little Falls, Cold Spring, Saint Joseph, Elk River, Monticello, Ramsey, Saint Michael, Andover, Ham Lake, Anoka, Champlin, Buffalo, Glencoe, Brownton, Silver Lake, Kandiyohi, Dassel, Minneapolis, Maple Grove, Saint Louis Park, Saint Paul, Robbinsdale, Crystal, New Hope, Brooklyn Center, Brainerd, Nisswa, Aitkin, Albany, Coon Rapids, Sauk Rapids and more!