When it comes to buying a home, there’s no shortage of choices — and many people have a hard time narrowing their search. For some buyers, the only option may be to make an offer on a property with cash instead of a traditional mortgage.
All-cash real estate offers are increasingly popular across the country, according to a recent report from Redfin. This type of sale typically involves a direct buyer or an iBuyer, and can dramatically cut down on the average time that it takes to sell a house.
For sellers, all-cash offers can be a win-win situation for everyone involved. Sellers can receive a higher price for the home and have less to worry about during the transaction, while buyers avoid the hassle of getting a mortgage application approved and are often able to close on their purchases faster.
A cash purchase also reduces a home’s carrying costs, including property taxes,
HOA fees/building maintenance, utilities and insurance, which is especially helpful in NYC where these expenses are typically higher than other major cities. This means that a seller can move forward with the cash sale while still preserving capital to invest in repairs and other renovations once they sell the home.
Buying with cash can be an attractive option for buyers, especially those with a large down payment. For example, investors and foreign buyers are often willing to pay more in cash, which allows them to purchase homes at a much lower price than they might otherwise be able to afford with a traditional mortgage. Read more https://www.cashhomebuyers.io/michigan/cash-house-buyers-grand-haven-mi/
All-cash buyers can also eliminate the need for bank fees and local mortgage taxes. Those expenses can add up quickly and can be particularly costly in high-priced areas, like New York City. In addition, a cash buyer can save money by not having to pay the interest on the mortgage for the entire duration of the loan.
As mortgage rates have risen, more and more people have opted to buy homes with cash. And with good reason.
The mortgage market has been hit hard by rising interest rates, which have made it harder for prospective homebuyers to get approved for a mortgage. And even though the rates have backed off, they’re still elevated significantly compared to a year ago, which is prompting many would-be buyers to look to alternative forms of financing.
In the current environment, however, buyers are finding a way around that obstacle. The number of first-time homebuyers has dropped, while the number of investor purchases has climbed. In fact, the share of home sales to investors rose to 17% last month, up from 10% a year earlier. Also read https://www.cash-buyers.net/michigan/cash-buyers-for-houses-grand-haven-mi/
While the trend isn’t happening everywhere, it’s happening more and more in places that are ripe for investment opportunities, such as Washington, D.C. and Frederick, Maryland.
ATTOM Data Solutions found that cash sales accounted for just over a quarter of single-family home and condo sales nationwide in 2018, down from 38% in 2011.
But the number is still significantly more than it was in 2011 before the recession.