In a housing market with an inventory squeeze, overwhelming demand and skyrocketing prices, there are ways to get ahead. One of those ways? Paying in all cash.
These offers often close faster than those awaiting mortgage approvals. It’s also less of a risk for sellers who worry a financing deal could fall apart.
More homebuyers are catching on: Twenty-five percent of all sales were all-cash deals in April, up from 15 percent from a year ago, CNN reported.
Some buyers with the means will put up a cash offer to close the deal quicker, then decide later if they want to opt for a mortgage and take advantage of low interest rates.
One agent told the publication that financed offers have to be at least 1 percent higher than the all-cash offer to seal the deal.
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Tomer Fridman, a Compass agent based in Beverly Hills, said the ultra-high end has always seen cash deals, but recent windfall from IPOs, company sales and the cryptocurrency frenzy has led to more.
“It is wild how many people have that much money,” Fridman told the publication.
For those who don’t have the option to pay in full, not all hope is lost: Buyers who need mortgages can still make all-cash offers with help of an online lender like HomeLight Cash Offer, a real estate technology firm and lender.
If a buyer qualifies for a loan, the firm evaluates the home and then makes an all-cash offer on the buyer’s behalf, CNN reported. If accepted, the company then buys the home and holds onto it while the actual buyer secures traditional financing, the publication added.
[CNN] — Cordilia James