According to the reports of the National Association of Realtors, there has been a drastic increase of the number of homes bought with cash from 2010 to 2011 – from 26% to 32%. Although buying a home might not be the best choice for most homeowners, this buying with cash trend is becoming more common in the real estate market.

Some say that this is change is brought by recession and the falling prices of homes and there are those who say that stricter loan standards of banks also contribute to the trend. Now if you are someone who has enough cash in hand to buy a house, do you think it is a good idea? Here is something to guide you.

Pros of Buying A House With Cash

• For A More Efficient Buying. By eliminating the bank in the buying process, you are saving a great amount of time and effort. You need not to sit with a mortgage broker and hope that everything will result in a loan term favorable to you. Paying with cash takes stress out of the picture and speeds up the buying process in a better price.

• Sense Of Security. In times of financial challenges, you don’t have to fear foreclosure since you already own the house. It gives you a sense of security that no matter how rocky things might get financially, you will be assured that your family has a place to stay.

• It Eliminates The Effects Of A Fluctuating Market. One good thing about owning a home is that no matter how bad or good the market does, you are able to make your own decision with what to do with your property without outside pressure. At most, you don’t have to worry about mortgage payments.

Disadvantages Of Buying A House

• No Liquidity. Getting a good bundle of cash out of your pockets is going to cost you a great deal of liquid assets. So it is often advised that you buy a house with sufficient cash in hand with a comfortable cushion of cash for emergencies.

• No Tax Breaks. Unfortunately, purchasing a home in cash will not save you from tax deductions. As there usually are mortgage proponents who argue to a favorable treatment of mortgage interest in the tax code, this could look like a bad news to anyone who plans on buying a house with cash.

Buying a house with cash is now slowly becoming a trend in the real estate market, and based on the arguments above, the reasons now seem pretty clear. Cash purchase offers great benefits, no doubt on that. Just make sure you set aside some cash to be used for emergency purposes. This way, buying a house will be one great financial move. Good luck!