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Buying a house with cash
– moneysense.ca
(Getty Images / Martin Barraud)You’re selling your home and a buyer submits an “all cash offer.” What does this mean and what are the advantages or disadvantages of buying a house with cash?
When a buyer is not making his purchase of your home subject to obtaining a mortgage, they can use a no-financing clause or they can use an all-cash-offer clause. In both circumstances, it means the buyer isn’t putting the obtaining of a mortgage as a necessary part of finalizing the sale of the home—getting a mortgage—the buyer’s financing is not a condition of the sale of the home.
There are three reasons why buyers make all-cash offers:
You’re offer is more attractive to the buyer.
You can get a better deal.
Theoretically, you’re not going through the hassles of getting a mortgage.
However, as a buyer making an all-cash offer, there are some drawbacks:
You’ll be tying up a lot of money in one asset.
As such, you’ll lose the power of leverage that a mortgage provides…
Much of that discussion concerns the cost of buying a home in a major market such as Toronto or Vancouver.
But what of rentals? How hard is it to find what you need with a median household income?
That depends entirely on where you’re looking.
The Canada Mortgage and Housing Corporation (CMHC) considers a home affordable when it takes up less than 30 per cent of a household’s before-tax income.
So to examine the challenges of renting in Canada, we took a household income of $60,000, which is below the median for every province. Then we looked at how tough it would be to rent a place for $1,500 per month — a round figure that accounts for approximately 30 per cent of a $60,000 annual salary.
In some cities, that’s enough to rent, and eventually own a four-bedroom house. In others, it’s enough to pay for a studio apartment.
Check out what’s available to rent for $1,500 or less across Canada*:
*NOTE: Apartments in this slideshow were listed for rent on July 27…
