Costs of paying cash for home

[Raen Dear]

Hello all: My husband and I have decided to purchase a home in The Villages (woo hoo) sometime this spring. We plan to pay cash. What types of fees and costs are associated with buying a home in Florida without a mortgage. We are in NY where everything is sky high. I've never paid cash for a home. I like the feeling.

We are open to either a new home or a preowned but we want a courtyard villa, if that makes a difference.

[logdog]

Congratulations on your decision. There are no fees for new construction if you pay cash. TV pays all closing costs. All you pay at closing is the prorated amenities, property taxes and assessments (plus the price of home). They will ask you for a down payment when you select your new home.

[Autoshow]

[QUOTE=logdog;331318]Congratulations on your decision. There are no fees for new construction if you pay cash. TV pays all closing costs. All you pay at closing is the prorated amenities, property taxes and assessments (plus the price of home). They will ask you for a down payment when you select your new home.[/QUOTE

you forgot to mention the bond and that could be expensive

[Raen Dear]

Thanks. Really the price of the home is really the stated price plus the bond, or remaining bond, in the case of a resale. Is the bond typically folded into the mortgage?

[coach]

No the bond is on your tax bill each year and listed as a non advolorum (sp?) item. If you had a morgage, the bond could be escrowed neach month, but a cash sale would just have the bond once a year. You could pay it off in full if you don't want to carry the cost annually.

[jebartle]

the bond really is an issue with many newbies and I can't blame them!



Thanks. Really the price of the home is really the stated price plus the bond, or remaining bond, in the case of a resale. Is the bond typically folded into the mortgage?

[Raen Dear]

Thanks. I'm trying to come close to estimating costs. Is there a formula for determining the bond on new homes? I notice the bond is not listed on the new homes website or on resales other than, sometimes, to note that the bond is paid off or reduced.

[Pturner]

Hi Raen Dear,
Welcome! You might want to buy title insurance, which many banks just roll into a mortgage. Don't know the cost but it is nominal. When you go to sell your house, it probably would help to have had it.

The bond on the house depends upon the number of homes within your district unit. If you are buying a new CYV, the bond will probably be $20k or more. You are given a once a year opportunity, in June or July (I forgot which) to pay off the bond in full. Otherwise it is prorated for 30 years in your tax bill, at an interest rate of 7.5 percent.

Hope this helps.

[robbie]

Thanks. I'm trying to come close to estimating costs. Is there a formula for determining the bond on new homes? I notice the bond is not listed on the new homes website or on resales other than, sometimes, to note that the bond is paid off or reduced.

Raen Dear... it's really based on the density of the neighborhood... some villa sections are larger than others so naturally their bond would be slightly lower since there are more people to share the cost... your village sales rep is the only way i was ever able to get the price of the bond... good luck...

[logdog]

you forgot to mention the bond and that could be expensive

I didn't mention the bond because that is really separate from the mortgage versus cash issue. Bond on a new CYV should be in the 12-15K range. It's about 20K on a Designer. Most people recommend you don't pay the bond off initially.

[katezbox]

I didn't mention the bond because that is really separate from the mortgage versus cash issue. Bond on a new CYV should be in the 12-15K range. It's about 20K on a Designer. Most people recommend you don't pay the bond off initially.

To pay (off) or not to pay (off) that is the question...

First of all, remember, the bond (or lack thereof) is just part of the cost of your home. Yes, it is paid for differently. Yes, you can pay it off.

I would discuss this with your financial adviser, but here are a couple of quick tips:

1. If this is your first home in TV, live there at least a year before you pay it off. If you HATE your home or location or TV or Florida and you need to resell shortly after you purchase, you will likely not recoup the amount you paid for the bond, or at least not all of it.

2. Otherwise, in terms of paying it off, i think it depends on your financial situation. if you are one of the lucky ones with a private pension, you may want to continue to pay it off a year at a time. If you are retiring with savings plus just a 401(k), you may want to pay if all off as you will not have that "fixed" income stream.

k

Oh my - I see that this is my 999th post...

[Bill-n-Brillo]

If you're buying a resale:
- get substantiation on the true remaining balance on the bond
- get a home inspection through an independent third party
- get a termite inspection
- some homeowner's insurance carriers might require a sinkhole inspection
- get title insurance (generally a cost to the seller) - already mentioned

Also as already mentioned, there are the various pro-rated costs for taxes, bond, etc. There will also be fees from the company that handles the closing for their preparation of the paperwork, processing, b.s., b.s., b.s. - they will give you a quote for those costs.

There's really not much to it!

Bill

[Tom Hannon]

Not to sabotoge this post, but I wonder how many homes are paid off in full at the closing. Many people roll over the $$$ from their old home and enter the next stage of their lives with no mortgage.

[ricthemic]

to pay (off) or not to pay (off) that is the question...

First of all, remember, the bond (or lack thereof) is just part of the cost of your home. Yes, it is paid for differently. Yes, you can pay it off.

I would discuss this with your financial adviser, but here are a couple of quick tips:

1. If this is your first home in tv, live there at least a year before you pay it off. If you hate your home or location or tv or florida and you need to resell shortly after you purchase, you will likely not recoup the amount you paid for the bond, or at least not all of it.

2. Otherwise, in terms of paying it off, i think it depends on your financial situation. If you are one of the lucky ones with a private pension, you may want to continue to pay it off a year at a time. If you are retiring with savings plus just a 401(k), you may want to pay if all off as you will not have that "fixed" income stream.

K

oh my - i see that this is my 999th post...

very good advice.

[Raen Dear]

Thank you all so much. Bottom line re the bond is you don't have to pay it at closing. So you factor in the cost of the home, the costs of closing, which seem reasonably nominal, and all the start up costs, utilities, etc.

In general it seems you would be better off with a new home, you get the warranties, nominal closing costs, and, well, it's new, no inherited problems. Location, however, is an issue. The new homes seem to be out in the boonies.

I'm squeamish about foreclosures, seems like battening on someone else's bad luck, but I've seen some awfully nice homes in advantageous location, i.e., nearer Sumpter Landing. Has anyone had experience buying foreclosures?

[logdog]

Thank you all so much. Bottom line re the bond is you don't have to pay it at closing. So you factor in the cost of the home, the costs of closing, which seem reasonably nominal, and all the start up costs, utilities, etc.

In general it seems you would be better off with a new home, you get the warranties, nominal closing costs, and, well, it's new, no inherited problems. Location, however, is an issue. The new homes seem to be out in the boonies.

I'm squeamish about foreclosures, seems like battening on someone else's bad luck, but I've seen some awfully nice homes in advantageous location, i.e., nearer Sumpter Landing. Has anyone had experience buying foreclosures?

Resales can be found closer to the town squires. Resales have more mature landscaping and more mature neighbors. Resales may have upgrades that are appealing to you and save some money down the road. Resales may have part or all of the bond paid off.

We looked at resales and decided to go with new construction. Newer areas have newer neighbors making it a little bit easier to fit in. "Boonies" is really a relative term here. We are by golf cart 5 minutes from Colony Plaza shopping and dining, 10 minutes from LSL and 20 minutes from either Spanish Springs or Walmart. When the newest Town Squire is built, that will be about 20-25 minutes away putting us in the middle of TV at build out.

New construction will always have golf and recreation nearby since that is developed before the homes are built. Resales can turn out to be a better financial decision if the owner has it priced right.

[cunch]

Forget the Title Insurance if you buy new. Just another fee you don't need.

[hedoman]

We paid cash for a resale. It saved us swing loans on our current home, points or costs to get a loan, mortgage insurance and a few other things. When we sell up here then I will put that net back into the income producing portfolio. So much cleaner to have my portfolio manager wire the money at closing.

[rubicon]

If you are selling a home in the downstate area then the prices here may please you? Without knowing your finances and finacial goals it would be beneficial to pay cash for a house and despite what you may hear pay off the bond as soon as possible. It can be paid off anytime before July each year. If you elect not to pay it off you will soon discover that like any obligation with a principal you will first have to pay off the interest which is to your disadvantage. Also be clear about the cost of your land, and your taxes. Finally you may want to be clear about any hidden costs. I know because they nailed me despite assurances that all had been disclosed.
Let me just say that I wish we had rented here for a time before buying

[Bill-n-Brillo]

.....Finally you may want to be clear about any hidden costs. I know because they nailed me despite assurances that all had been disclosed.........

What were the costs that weren't disclosed?

Thanks -
Bill

[Challenger]

Forget the Title Insurance if you buy new. Just another fee you don't need.

Foregoing Title Ins. is a choice, but IMHO it may be a regrettable one. Make sure you know the pros and cons of such a decision. Talk to an attorney or two who has no financial interest in your transaction.

[Raen Dear]

Finally you may want to be clear about any hidden costs. I know because they nailed me despite assurances that all had been disclosed.
Let me just say that I wish we had rented here for a time before buying[/QUOTE]

Yes, what hidden costs?

[Bryan]

You are very lucky to be purchasing at this time and for cash. It is really a Buyers Market. IMHO, resales are usually better values - especially for cash buyers. You CANNOT haggle over price for a new home but you can over a resale. You mentioned foreclosures. If you find one you like, that may be a great bargain. In the rest of the USA, the cost of the bond that we have here would be part of the price of the home. Here, you think you get a great deal on a home only to learn that you ALSO have a $20K bond to pay off that was not included in the purchase price. Be sure to factor in the bond cost as part of your purchase price - even though you don't have to come up with that money at closing. As a buyer, you have every right to know, and you should demand to be told, the bond on your home. On resales, the old owner paid some so it would be the bond balance. Know that number when you are negotating for the purchase. Some resales are advertised as "Bond Paid Off" because that makes them more attractive buys. On a resale, you can always use the bond balance as part of your price negotiation strategy. Take your time looking around. There are so many homes and so many extras available, it could take awhile to find exactly what you want. Even if you plan to buy new, look around to decide what extras you might want to order when you build. Actually, renting for a month or so is probably a wise idea - then use that time to look around.

[Taj44]

You are very lucky to be purchasing at this time and for cash. It is really a Buyers Market. IMHO, resales are usually better values - especially for cash buyers. You CANNOT haggle over price for a new home but you can over a resale.... Here, you think you get a great deal on a home only to learn that you ALSO have a $20K bond to pay off that was not included in the purchase price. Be sure to factor in the bond cost as part of your purchase price... On a resale, you can always use the bond balance as part of your price negotiation strategy... .


Really good comments about the bond. The bonds on the new homes are over $20,000, while depending on the age of the home, bonds on resales are much less for the same model of home, and you will most likely be able to get a more central location. If you see a resale on the market you like, don't be put off by the asking price - people are generally willing to take much less, especially if the home has been on the market for awhile. Good luck.

[Kelsie52]

Finally you may want to be clear about any hidden costs. I know because they nailed me despite assurances that all had been disclosed.
Let me just say that I wish we had rented here for a time before buying

Yes, what hidden costs?[/QUOTE]

Raen Dear

You are doing the right thing --asking questions here !! you will get many view points.. So let me add mine

We bought new (Buttonwood) couldnt be happier, especially because we arrived here in late Oct --before the winter rolled in up North.

We had no hidden costs --everything that was asked for was listed months before when we signed the contract .We have been here almost 4 months and have found nothing that surprised us other than how quickly the days go by----

Buttonwood or the next few new areas are not in the boonies. Within a few years we feel these areas will be central to both Lake Sumter and Brownwood

Paying the bond off for us was a wait and see --people will tell you lots of Villagers move 3 times within the Villages for one reason or another . If you are going to move why pay off the bond ? We will decide in a year or so .

Title insurance !! Peace of mind .. we took it on on advice from a friend up north who was a Title company Vice president ---he told us very few claims for ownership of the property are ever overturned but many are contested. The insurance company has to defend the case for you. No insurance you are on your own --again will it happen --? dont think so .. but I can sleep better becaue my wife isnt asking me what if ??

Good luck:MOJE_whot:

[rubicon]

BB: I spoke with the smarter half of this twosome and apparently I misunderstood,;albeit I did ask and was not given a response. We took out a bridge loan and paid it off within a month and way ahead of the closing. I was laboring under the belief that since we would not be using the loan we would not have had to make a house payment. The bank grabbed us for one month which was a sizeable amount. I knew that with a mortgage you are always one month ahead of payment but for some reason I was left with the impression that it did not apply in this situation because we were paying it off before it became effective. So from my prospective it was a surprise and an unpleasant one at that time. Banks you can't live with them and you can't live without them, although many of us really give it the old college try and that is why God gave the banks Obama. Good Day!

[Pturner]

We had no hidden costs at closing and have had no hidden costs since we purchased in '09. I agree that this is an excellent time to purchase a negotiable resale with extras already included and some or all of the bond paid.

There are great deals to be had on foreclosures, but you have to proceed more carefully. Don't even think of buying a foreclosure without title insurance. Then again, I wouldn't buy any home without it. To me, the cost is too inconsequential to skip it. The historical ownership of any property can be challenged. You could also have a harder time reselling your house if the title wasn't properly researched and insured. No title insurance could be penny wise and pound foolish.

[Bill-n-Brillo]

BB: I spoke with the smarter half of this twosome and apparently I misunderstood,;albeit I did ask and was not given a response. We took out a bridge loan and paid it off within a month and way ahead of the closing. I was laboring under the belief that since we would not be using the loan we would not have had to make a house payment. The bank grabbed us for one month which was a sizeable amount. I knew that with a mortgage you are always one month ahead of payment but for some reason I was left with the impression that it did not apply in this situation because we were paying it off before it became effective. So from my prospective it was a surprise and an unpleasant one at that time. Banks you can't live with them and you can't live without them, although many of us really give it the old college try and that is why God gave the banks Obama. Good Day!

rubicon - Thanks for the feedback. Didn't realize there was a bridge loan involved in your deal. Yep, when you start getting the banks involved in loaning you money, they'll have their hand in your pocket somehow! :) But at the end of the day, their fall-back position is that all of the terms of the loan are in the paperwork............somewhere............all you have to do is try to find it!

Thanks again -
Bill

[katezbox]

We had no hidden costs at closing and have had no hidden costs since we purchased in '09. I agree that this is an excellent time to purchase a negotiable resale with extras already included and some or all of the bond paid.

There are great deals to be had on foreclosures, but you have to proceed more carefully. Don't even think of buying a foreclosure without title insurance. Then again, I wouldn't buy any home without it. To me, the cost is too inconsequential to skip it. The historical ownership of any property can be challenged. You could also have a harder time reselling your house if the title wasn't properly researched and insured. No title insurance could be penny wise and pound foolish.

:MOJE_whot::MOJE_whot::MOJE_whot::MOJE_whot:

[skyguy79]

You could also have a harder time reselling your house if the title wasn't properly researched and insured.P, I'm not judging you on the above statement and this is not the first time I've read it, but I don't quite understand the reasoning behind it. We've bought and sold homes a number of times over the years and at no time did a question of our having, or any buyers having title insurance come up in the process.

When we bought there were title searches and we purchased title insurance, and that's all that mattered to us. Weither or not the sellers had bought title insurance when they bought the house was of no interest or consequence to us because it only covered them during the life of their ownership. It didn't cover any subsequent buyers. Can someone tell me if there's something I'm missing here that real estate agents and lawyers failed to inform us?

[Skybo]

During my research on closing costs I’ve come across a couple of FAQs (on realtor sites) which stated that in Florida the title insurance and state (doc stamp) tax are paid for by the seller on a pre-owned home and paid for by the buyer on a new home. Is that correct?

[logdog]

During my research on closing costs I’ve come across a couple of FAQs (on realtor sites) which stated that in Florida the title insurance and state (doc stamp) tax are paid for by the seller on a pre-owned home and paid for by the buyer on a new home. Is that correct?

TV paid state tax stamps and all other closing costs on our new home. We had no closing costs other than prorated taxes, amenities and assessments. We were given the option of buying title insurance outside the closing process.

[784caroline]

SkyGuy..You are correct..i believe Katzbox in her support for (owners) Title insurance overstated its benefits. Peace of mind, of course, but I have never nor do i know of anyone who asked if the current owners of a house that one is considering buying had "Owners" title insurance...and it would not matter if you consumated the sale and you got your own.


I personally support title insurance for resales and foreclosures in The Villages but in my mind its an individual choice and most likely not worth the cost if you purchase new in The Villages From the Developer. Again, for new buys, individual choice and hopfully no one will ever be proven right or wrong.

[dwbevan]

Yes, what hidden costs?

Raen Dear

You are doing the right thing --asking questions here !! you will get many view points.. So let me add mine

We bought new (Buttonwood) couldnt be happier, especially because we arrived here in late Oct --before the winter rolled in up North.

We had no hidden costs --everything that was asked for was listed months before when we signed the contract .We have been here almost 4 months and have found nothing that surprised us other than how quickly the days go by----

Buttonwood or the next few new areas are not in the boonies. Within a few years we feel these areas will be central to both Lake Sumter and Brownwood

Paying the bond off for us was a wait and see --people will tell you lots of Villagers move 3 times within the Villages for one reason or another . If you are going to move why pay off the bond ? We will decide in a year or so .

Title insurance !! Peace of mind .. we took it on on advice from a friend up north who was a Title company Vice president ---he told us very few claims for ownership of the property are ever overturned but many are contested. The insurance company has to defend the case for you. No insurance you are on your own --again will it happen --? dont think so .. but I can sleep better becaue my wife isnt asking me what if ??

Good luck:MOJE_whot:[/QUOTE]

I agree with all of the above - we did rent for a month - but bought in two weeks. We will be snow birds for awhile by choice - we are in Buttonwood for the reasons stated above and have not paid our bond off for the reasons stated above. Our bond on a designer home corner lot is just under 20K.

All of the plusses of living here full or part time outweigh everything else. As I have said before - less than 1 year ago I firmly believed I would not leave Western Mass for anyting more than a vacation. I miss my kids and grandchildren, however, they are surviving without me and SKYPE is wonderful. All will be visiting before we leave for the summer.

We have had more fun and been more active physically and socially in the past 6 weeks than in the past 6 years. The pros far outweigh any cons. :welcome:

[Taj44]

Raen Dear

....
Buttonwood or the next few new areas are not in the boonies. Within a few years we feel these areas will be central to both Lake Sumter and Brownwood...

I guess its your frame of reference, but I would consider Buttonwod to be on the outskirts. Buttonwood would be central to Lake Sumter and Brownwood, but Lake Sumter is the approximate center of The Villages at full buildout, so that means Buttonwood will be on the outskirts of anything north of Sumter, which is about half The Villages.