Tuesday, March 29, 2011
Buying homes with cash
What's in your wallet? According to a study by the National Association of Realtors (NAR), 33% of home sales in February were CASH DEALS. A number of these homes were foreclosures bought by investors to renovate and resell. Cash deals are due to a combination of factors in "traditional sales", short sales and foreclosures:
(1) Homes being priced at a point where some buyers can make more attractive all cash offer instead of contingent on loan approval. When all offers are equal,cash wins out over contingent on loan approval.
Real estate transactions can settle quicker with cash deals than with buyers getting mortgages. This is particularly important for short sales, when the owner is trying to sell his/her home before it forecloses. There are lenders who can close loans quickly to avoid home going into foreclosure. In short sales there are also some deals where a "professional negotiator" is involved and/or the seller's lender seems more cooperative/understanding of what it takes in time for a new buyer's loan to close. So they work better with buyers' loans in trying to avoid their clients (the sellers)foreclosing.
(2)Depending on the property condition of a home,some lenders won't fund a buyer's loan, which is a seperate issue from buyers being approved for loans. In such a case,only all cash deals will work.
Often investors who can do home improvements themselves and/or with their own work crews, look for homes at certain price points that they can renovate and either resell or rent. To this point over 23% of sales in February were purchases by investors(NAR).
If you or someone you know is thinking of selling and/or buying a home,has a real estate question or wants to know about their "local market" in Metro, DC, give me a call or send me a message with their contact information
I am hear to help.
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