Save. Spend. Splurge.

How much money do I need to buy a house in cash?

Sounds like a rhetorical question, but it isn’t for me.

I am thinking of how much money I would need above and beyond the actual purchase price (plus all the fees and so on) of buying a house.

I’d need renovation / repair money (just in case), current living money, and an emergency stash at the very least.

Plus I’d also not want to put 90% of my net worth into a home.

So if I were to buy a $360,000 home and put down $180,000 in cash towards it, I would need:

  • Home: $180,000
  • Other Fees / Closing Costs: $20,000 (totally guessing at this number here)
  • Repair Money: $10,000 (also guessing at this one)
  • Current Living Money: $20,000
  • Emergency Money: $50,000

..which would leave me with 30% of my net worth in liquid assets and 70% in my home, a ratio that would slowly go down over time as I build more liquid assets and my home becomes less and less important in my overall net worth picture.



This is doable. I can definitely do this, especially if I don’t feel the need to buy a home right now (which I don’t).

Am I missing anything?




  • Sally

    Every place is different, but I would do some research on required stuff before you even look at homes. I asked my realtor for a copy of the standard purchase agreement in California before we ever looked at homes. I had an inspector who I had spoken to whose work was great and price was competitive (He charged $175 when they say expect to pay $300). As for closing costs, you may avoid them if you have a buyer who wants to sell. We bought our place as an REO so the seller was giving a credit for most of the closing costs. $10K for repairs would assume the place is in pretty good shape and not bigger than 1200 square feet. You might be buying a bunch of stuff that comes with a rental- a fridge and washer/dryer will be at least $3k total. You’ll want to get ducts cleaned before you turn on central air. Just lots of little setup stuff for the home that you don’t think about, but the good news it’s mostly lower cost stuff. Altogether, it probably comes close to $10k. Also, depending on the home, you may find yourself in a beautiful home with zero window coverings (and therefore no privacy!). We’ve spent over $600 on window coverings and still have 2 more windows that are bare!

  • Emily @ Simple Cheap Mom

    The thing that stands out to me is that you still have a mortgage for half! If you want to know how much you’d need in cash, I’d add $180,000.

    Your estimate for closing costs seems a little high, but using that amount would cover your legal fees, land transfer taxes, all the standard stuff, plus your new lawn mower, Dyson vacuums, Christmas lights and all that other stuff that would come up in the first year.

    Whether buying in cash is the right choice is a different question witha different answer for everyone. (we’re paying off our mortgage early)

  • ArianaAuburn

    Don’t forget home owner’s insurance and property taxes! My friend who wanted to save as much money as possible, searched for properties for a whole year just to find one that did not have major problems. It also helped getting a second opinion on the home inspection and massive research on the property’s records dating back 10 years or so. I wish you luck on your search and don’t be afraid to walk away from a bad deal.

  • StackingCash

    Well you can take off the majority of closing costs because that is mainly the costs of getting a loan. You should be looking to get a cash discount because the seller would be wise to sell it to you because it is a sure thing, no mortgage to qualify for. However there are many schools of thought where the mortgage can be considered “good.” Mainly locking in a low interest rate while getting a higher rate through investing. I hate debt just as much as the next PF person, but you should do a great deal more research considering the question you just posed and not really knowing how to answer it. I’m a frequent reader and commenter on Punch Debt in the Face, and he recently purchased a home. There were many comments regarding his home purchase and was quite educational, especially from a commenter named Larry. I would also suggest taking a real estate class for a license, you can learn the inner workings of a real estate transaction such as the commision rates and possibly retain a commision for yourself! I’m not sure what the cost and time requirements are where you live, but here in Las Vegas, the classes here are minimal time and money compared to the education received.

    My wife and I “paid” off our home a few years back, but unfortunately we still need to pay taxes, insurance, utilities, and home maintenance. Be mindful of these home ownership costs because they can get quite high and cannot be negotiated down easily. Look for homes that are efficient in those costs as well to get an better overall picture of the money you need to support a home.

  • Irene

    The costs associated with buying a home can be really unpredictable. You can count on $400-$600 for home inspection (I would still do this even if you get a condo… you can use the results as leverage), $1500-$2000 for lawyers fees.
    You can find a list of common renovating costs on the website. After having renovated our bungalow, I would say it is fairly accurate.
    Home costs that caught me off guard were – insurance (way high because of hail/flood damage in 2013), and the ever increasing property taxes.
    I would create a spreadsheet and just start adding up all the costs for each particular home, and the “deal” will reveal itself.

  • Debbie M

    There may be additional things you have to buy right away in order to make the place livable. I needed a refrigerator and curtains, and my insurance company made me replace the roof. Some people also need an oven, but there was one there that I asked to be able to keep.

    There may be other things you want right away. I weatherized the house, got a washer, installed an extra ceiling fan, and planted trees. Some people paint, replace things they consider to be hideous (curtains, carpet, ceiling fixtures) and feel like they need to fill up the rooms with furniture.

  • Kathy

    We are actually in that predicament right now. (A nice one to be in.) Next year we are building a custom home. We are trying to decide whether to pay cash or take out a mortgage. Our investments will yield enough to pay the mortgage and we would still have the lump sum of money sitting there if we needed it. Plus, the mortgage would give us an interest deduction on our taxes. On the other hand, we could pay cash and be debt free. It would impact our yield somewhat, but through judicious selling of non-gainers we wouldn’t lose all of our investment income. However, we would have to liquidate more investments than just the cost of the house due to taxes on the gain. Needless to say, this is a nice predicament to be in.

  • Petrish @ Debt Free Martini

    I will never tell you not to do this because trust me I can only imagine the feeling of having that a home paid for in cash and living mortgage free. Still I feel that there may be more efficient ways to go about buying a home while building wealth with so much money. You might need to do a part 2 to this post to help us get an idea of where you’re going with this one.

  • SarahN

    But why? Why buy with that proportion of cash? And you could have some of your cash going towards your mortgage in an offset account, so it’s minimising your interest, but still effectively liquid and usable for repairs etc.

    • save. spend. splurge.

      I really loathe the idea of debt. I am considering a mortgage for just 5 years but an amount I can easily pay in 5 years or am able to overpay with one big lump sum at the end. Interest rates are definitely going to go up, so.. *shrug* Don’t want to get caught.

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