J and I agreed we wouldn’t start the house-buying process until July 2013. Logistically, and financially, it just didn’t make any sense to start it any earlier.
I saw our house listed on the market in early May last year on a properties for rent site, and I knew it was the perfect house for us. I was sure it wouldn’t still be on the market by our July start date, so after months (years?) of constantly checking online house listings, I stopped looking altogether. I was getting too emotionally involved to this 4-bedroom, 2.5-bath home and I didn’t want to rush into a decision we weren’t ready for.
At the end of June, I went back online and saw that miraculously the house had not been purchased yet. I showed it to J, and he loved it. It was in our price range and had everything on our must-have list and even our want-to-have list.
Most homebuyers are going to need a mortgage loan in order to buy a house, but these days it’s not unheard of for buyers to purchase their home with cold, hard cash. Whether it’s money saved, equity from the sale of a previous home, a cash windfall, or using a cash offer platform from a lender, buying a home for cash has become more and more common.
As a buyer, you might think that paying cash for a house is the easiest, most hassle-free way to buy — and quite often, it is! But when large amounts of cash change hands, there is one thing you always need to consider: tax ramifications.
Taxes aren’t something we really like to think about, but it’s important to know what, if anything, you need to do in terms of what the IRS might require when you buy a house with cash. Do you report the sale? Are you responsible for any additional taxes or fees? And what about potential write-offs for the purchase? Do you still qualify for any kind of tax break?
We’ve talked to real estate agents who are in the know, as well as tax specialists who understand just what the IRS might require from you as a cash buyer, to help you decide whether or not you should really consider paying cash for that new home, here are some tools to pay to IRS without problems.
The next week was crazy: We got a realtor on June 28, saw the house on June 29, made an offer on July 1, counter-offered July 2, and our offer was accepted on July 4th.
Given that this was the most expensive purchase we have ever made, it’s surprising how easy and quickly we made the decision. We found ourselves under contract for this house after six days of starting the process.
Over a year later, I still can’t believe how lucky we are to live here.