Basically like a 30 year old mortgage, but instead of borrowing money from a bank, you just use your own stack of cash.
Possible to Pay Cash Installments for a House?
DeafMutePretender on 07/08/2019 - 21:12
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Banks exist so buyers and sellers are on more of an equal footing
Banks exist to make money for themselves by taking a cut of every transaction.
@pjetson: Banks exist to lend money to people who don't have money to buy stuff outright.
OP seems to think saving up money is this amazing achievement that he should be rewarded for, over and above not having to pay interest on borrowed money.
Banks exist to lend money to people who don't have money to buy stuff outright.
Banks only do that because they can make money from doing it.
lol wtf so you want all the benefits of a mortage but not actually pay for the cost(interest) of a mortage.
Why don't you put yourself in the Sellers shoes and see how'd you feel if someone asked you to let them pay you over 30 years. While they livid in that house so they saved on interest charges and invest that money in other assets; while they live in the asset they just bought from you.
You don't think that sounds a little ridiculous.What if you the seller wanted to buy a house after selling said house or invest? What are you gonna say "Hey I have an IOU from the guy I sold it too can we do the same arrangement?"
And why do you keep bringing up eBay coupon codes.
so you want all the benefits of a mortage but not actually pay for the cost(interest) of a mortage.
Perfectly reasonable request…..lol
Guys, the post may be a troll post. However, in real world this is another possible way of buying a house. Look into 'terms contracts'. This is usually between parties known to each other. Rent before you buy and the rent goes towards part of the purchase price, or parents helping their kids in buying their own properties.
Or the kids could go. Imma wait my parents to keel over or we throw them in a nursing home later. House is ours then. For free. See what i did there. Also a likely scenario.
Not saying your idea wont work however it wont in all cases. Best to treat this kinds of things on a case by case.
Term Contracts are real world arrangements. People in property and tax law would know. These are not very common, but aren’t uncommon either.
the difference is, if the price is $1m, then the total price that you end up paying over time will be >$1m
again, not different form a mortgage
think OP is saying im gonna own that house, keep that $1m, and pay over 20years but keep all the earned interest
dont think there is something like that
So you mean like, if you rent a place for 30 years, you should be able to own it? Sounds like a bad deal for the seller/leaser.
Only if you had entered into a contract to buy it 30 years back. Contribution for a terms contract would usually be higher than rent.
lol
The guy has none whatsoever idea of what he is talking about (or gal).
So either a poor troll post or a really clueless one, and very stereotypically presumtious one as well.
I was first introduced to this concept… maybe a couple of decades back when real estate was cheaper. It was pushed by at least one of those real estate investment schemes as a way to sell at a higher cash rate than to those who couldn't normally get finance. Essentially the seller becomes a private bank or retains ownership. It was a long time back, so I might be remembering this a little wrong.
My god what did I just read?
This does happen in some situations, but it's generally only when a parent is selling to a child and has recently retired (tax minimisation).
As the buyer, if you have all of the money, you could make a cash offer or buy something at auction. What's the reason for not paying outright? Because you want to reinvest the rest of the money, if you want to reinvest the rest of the money, you could just get a mortgage. Otherwise, people would be buying houses on the promise of a weekly payment, renting those properties out for a small loss, but still being better off (because your repayments would likely be less than the rental amount). Great senario for the buyer, as a matter of fact, I'd buy 10 properties under those conditions straight away!
As previously stated, seller doesn't get the cash up front, so they would probably want to charge you some sort of interest rate (because you're effectively borrowing their money, like a private lender senario). Unless you're involved in sharia banking with admin fees instead of interest fees (because anything jewish is evil). They may consider it if you signed a rental agreement and kept the house in their name, but in 20 years time, what's to stop them from saying "no, he was only a tenant!". If it's a formal house sale, the title gets put into your name, you could make the firt couple of payments, then refuse to pay any more, then the seller would have to chase you in court (the court would see it as a debt, probably not a secured debt against the property), so they could go through the court system and get you declared bankrupt, but you'd still have the house as your primary residence, whatever it's worth, virtually for free.
Then you have issues with the CTF / AML legislation for any cash transaction over 10,000$
Better idea, leave the cash in an offset account.
Other idea, if you have the income to support it, buy a whole bunch of houses, using the cash as a deposit, rent them out, with negative gearing and "maintenance" tax breaks, you'll probably avoid paying much interest and get a little income.
Surely this is a troll post… I lost so many brain cells reading this.
I think I've worked out OP's train of thought. To them, saving up money (because it happens so rarely now) is supposed to be some great achievement, so OP figures if they manage to save up to 100%, they should unlock some kind of special reward over and above just not paying interest.
Could be….
My theory is he's very young (I'm guessing about 18) and mum and dad in China have always paid for everything. The real world (mortgages, interest) is very foreign to him culturally and literally.
Agree, and yeah definitely possible they're Australian-Chinese and so have been told (by parents, society, etc) that saving is the holy grail, only now to realise that you don't get a cookie for saving up money, you only end up with… savings….
What gets me is that OP clearly understands the value of having money now because they understand they can invest it.
Why the notion that the seller and the bank can also invest the money escapes OP is… bewildering.
You need some detergent for Laundry.
How about OP buys a house outright and let me buy that house off you using your scheme.
its possible to buy a house and not pay interest.
it has offset and your money in savings acct is higher than the loan itself.
Troll, thread closed
Yeah you can, but it will need to just one installement though lol
Fair point.
Probably just a bored teenager trolling the forum.
I seriously doubt he/she is even Chinese.
I seriously doubt he/she is even Chinese
It's possible. Money is power in China. I find a lot of new mainland immigrants still believe money gives them the right to do a what they want, or others will automatically bend over for you. Might work over there, but not here, especially when there's no incentive.
But even then - money being power requires you to spend it!
Let's not kid ourselves. For the right kind of money, people will bend over for it.
Yep, if you give them the money, OP doesn't want to hand over the money but wants you to bend over for free.
So you want to lay-by a property?
Yeah. You got afterpay?
Come on guys.
Nothing wrong with this concept if the seller want to take on the role of the banker.
I'll sell my house for market price, split over 20 years as you wanted, and a modest interest charge of approx 100% on top of the monthly payment for lost opportunity costs, projected capital growth, maintenance & other local rates and taxes, and then add plus an amount equalling to 40% to cover my tax liability because it's now income,
So for my $750,000 property, I will retain the title whilst you pay me approx $9000 per month over 20 years to live in it.
That's doable. I am taking a risk on the projected capital growth while you save on the outlay.
will you take $2.50 and this maccas toy I found from the 90's ?
Do you want to buy my house, 50% deposit and then pay me monthly installments over 20 years and I live in the house as the owner and rent free until you fully pay it off? The selling price will be indexed to CPI over the pay down period.
+1 if you run out of your daily neg in this thread
Guilty as charged.
Ah, easier to attract negs, -1 instead of +1 please
Seriously?
What do you do for a job, can you please give me your goods/service and i will pay you in installments over the next 30 years?
I mean, thats more likely than buying a house - why would anyone let you have a free ride at their expense.
Yes, entirely possible but I will sell the house based on future pricing and you can't own and occupy the house until fully paid in 30 years time.
Find a lawyer, find an elderly person who has no descendant and are willing to sell their house. Pay them every week (like a rent) with the owners still living in their house. The day they are both gone, the house is yours and you didn t need to borrow from the bank.
This is a scheme that work in europe like France. You basically enter an agreement that say you will own the house only after the death of the owner. But while they are still alive, they will get not only paid but will also be able to enjoy their properties until their last day. So you won't know for how long you will have to pay them as it depends a lot on how long they live.
Except OP wants to move in straight away :|
Even a parent doing this for their child is a bad idea because if the child has a partner that moves in and pays half the loan and they break up that partner can now take half the property value.. best to RENT it to a child and they will inherit it once you pass either way.
Daft
You could buy a house that has a granny flat and rent that out to generate income, or alternatively rent out the rooms you aren't using.
Was it just me found out that he has had quite a lot of troll posts before?
"This forum topic is not published.
G'day OzBargain. I Am The Governor of The Reserve Bank of Australia. AMA! (Pointless)
This forum topic is not published.
Fall in Racism on OzBargain (Trolling)
This forum topic is not published.
Anyone Went to The Free Admission @ Islamic Museum of Australia Yesterday? How Was It? (Duplicate)"Someone pin this post!
(Or just close the thread lol)
If you have enough money to buy it out, why not just you know buy it out? Why bother with stupid complications.
Yes its possible but you have to pay a very high premium for this deal and you will not own the house until you've paid all the instalments (the total loan) just like you don't outright own your house if there's a mortgage on it with a bank until you payoff the mortgage.
Of course anything is possible. You need to take into account the time value of money and credit risk protection for the seller:
1 dollar today is worth (1+r) in a year's time, etc. This will be reflected in selling price.
You don't get title until you've made all payments. If you default, you lose all payments you've made to date as they were effectively rental payments.
PM me if interested - I can accomodate a number of Aus capital cities.
happy to consider a JV with you on this deal if the OP comes up with the cash.
Me 3, I don't have any property but I will just squat for 30 years till I own something :D
Went to an apartment showing in Brisbane CBD - New Meriton building a while back.
There was a Chinese guy there around 20-25 years old asking whether he could pay for the penthouse with his credit card.
The guy showing everyone around was like - its around 1.0 - 1.2 Mil - jokingly.
Chinese dude went yep - what's the transaction fee like?
A friend of a friend bought a porsche with money in a duffle bag. Thats right cold hard cash. One payment.
Hey if you got the money. Why not right?
did the white guy get the commission?
Wouldn't know i wasn't there. Though my friend is not one to make up 'rich boy' stories.
This one other friend of his who is also loaded. This time i was there. We were all at my friends house. He was parked in by a high end merc parked in his driveway. Couldnt remember which model. For context my friend drives a honda accord.
Unbeknownst to him it was his rich boy mates new car.
My friend needed to buy ice at the servo for the drinks we were having. Instead of the owner of the merc moving his car because he was blocking my friend. He just threw him the keys. Offering to take his car instead to get ice from the servo.
+1 for F&F reference
Not uncommon in business where buyer can skip banks and get vendor finance (with lower interest). Makes sense for harderto move assets or ongoing business concerns.
Can't see why anyone who sell residential this way. Most likely a troll post but info might be useful to others.
Hey OP,
Can you buy me a Lamborghini? I’ll pay you back in … Say … eighty years.Alright. Seems legit. Nothing suss.
Lmfao, this is gold!
Is it possible yes
Would it happen certainly notIf you are stupid enough to think of a scenario like this, then you will be able to find a house owner who can sell you the house with cash repayment over the next 20 years. And I mean you may need to wait 20 years to find a seller.
You could look at what's called a Deed of Covenant. My parents purchased their house in the UK using one of these as they couldn't get a regular mortgage.
Edit: and yes, it was a 20 year agreement to pay installments directly to the seller. To be fair it was drawn up in the mid to late sixties and everyone's circumstances were much different then.
The reason you want to hold onto your money (so you can invest it and make money) is the same reason no rational seller would accept your offer (unless possibly if your offer was well above market value).
There is a time value to money. You're basically asking the seller to give you $XXX,XXX (total amount of interest you would have paid on a home loan).
Lol. Possible with one clause. Don’t get sale signed document from owner unless full amount paid. Collect it after 30 years.
The risk just transferred from owner to whom? U know it, Right?
Precisely that’s y banks come into picture when mortgaged.Looks like the downvote crew arrived. For those who were wondering, I'm black. I just respect the frugality of my Chinese brothers.
From the US?
Many people don't understand how deals are structured - standard and non-standard. What you're asking is non-standard (so possibly the down votes due to lack of familiarity).
What comments were you looking for, yes/no, examples, opportunities?
You're getting downvoted because your ideas are stupid and impractical. You're pushing a Retravision model for houses, while ignoring the fact those 'rent to own' models have outrageous markups commensurate to the risk.
There's literally no reason why a seller would go along with your hare-brained scheme. Why take $1M now when you can get a pinky promise for $50,000 over the next 20 years? Sounds legit.
Sophisticated sellers would consider him subject to their terms. If he paid $50k rent p.a. then that is higher than normal rent, some of which can go toward down payment, also need balloon payment at end or say $60k p.a. to cover forgone interest. If he defaults he got to live in property like any other tenant and seller can lease out or sell again.
You're getting downvoted because your ideas are stupid and impractical.
Seems like I'm getting downvoted because they're racist.
No, they are just stupid.
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Yeah I guess they would be, as nobody is providing any security so the person with the asset has to be careful, so going to be bad for the buyer. Banks exist so buyers and sellers are on more of an equal footing.