Should an all cash home buyer have a home inspection done?


If you are an all cash buyer, no one will make you get a home inspection.  However, it is still wise to do so.  In Florida, the seller typically pays for the owner's title insurance policy and the documentary stamps on the warranty deed.  In an cash closing, the closing could be as soon as two weeks after the Contract for Sale and Purchase is signed by the parties.


Attorney Tom Olsen: Lyn, you're on News 96.5. Go ahead.

Lyn: Hi. Good morning.

Attorney Tom Olsen: Hey.

Lyn: Thanks for taking my call. I have a question. I am considering a home purchase from a friend. We've been friends for about 30 years. It would be a cash purchase, from friend to friend. I've never done this before, so I had a couple of questions. First, if it's cash purchase, there's no loan involved, do you still recommend an inspection or is it required?

Attorney Tom Olsen: It would not be required but I would recommend it. Lyn, even though you're buying from a friend, even though you're an all-cash buyer, I do not recommend that this is an opportunity to cut any corners. So yes. First of all, I would suggest that you have a full-blown contract for sale and purchase done. I would recommend that you have an inspection done.

Lyn: Okay. All right. I have a couple of other questions if that's okay.

Attorney Tom Olsen: Yes.

Lyn: Okay. In this type of sale -- Again, I've been in my current home for about 25 years, so this is pretty new to me at this point. Who would pay closing costs and what are they just basically? I mean, I know there's different ones but would the seller or the buyer or is it the applicant?

Attorney Tom Olsen: Okay. It is customary that your seller pay the two major closing costs. They are doc stamps on a deed and the other one is title insurance. If you are an all-cash buyer, Lyn, your closing cost might be $250 or less. In this situation, your seller's going to pay the bulk of the closing cost. That would be customary.

Lyn: Wow. Okay. I have another question regarding taxes. When you purchase a home in Florida, do you pay tax like you would when you purchase a major appliance? I just didn't know.

Attorney Tom Olsen: Well, when you do a deed and you record it in the public records here in the State of Florida, you have to pay the State of Florida documentary stamps for the privilege of transacting that. The doc stamps are based on how much money is changing hands between the two parties. That is a tax, Lyn. But that is customarily paid by the seller.

Lyn: Just for example, if the seller sold me the house for $200,000, is there a percentage that the doc stamp is based on or?

Attorney Tom Olsen: The doc stamps on $200,000 would be $1,400.

Lyn: Okay. All right. That's not what we're looking at, but I just wanted to see. Usually, the buyer pays that or the seller? The seller, right?

Attorney Tom Olsen: Usually, the seller pays that.

Lyn: Okay. Okay. If a friend to friend does this -- We've been friends for a long time. They live in another state. They're ready to get rid of this property. How long does the process take if we say, "Okay. Let's do this." Is it a long involved process and should we get an attorney?

Attorney Tom Olsen: Lyn, again, there's no opportunity to cut corners here. Step number one is a contract for sale and purchase. It is signed by the buyer, signed by the seller. That way, we have a meeting of the minds. Once the contract is signed, then you would give it to a title company like me. I would do a title search. Then we would have a closing where documents and moneys change hands. Among the other things that you would receive would be a title insurance policy that insures to you that you're getting good, clear title to this piece of property, free and clear of all liens and encumbrances. Lyn, to get to do that, you need to either have a title company or an attorney assist you. Lyn, I could definitely help you with this. From contract to closing, I could help you with this.

Lyn: Okay. Do you have a number where we can follow through with this?

Attorney Tom Olsen: Yes. Lyn, you can call me at my office at 407-423-5561, or reach me through our website. That is Like YouTube, but Lyn, I look forward to being of assistance to you.