So, what does this do to the average house-hunter needing a financing contingency? When you work with The PURTEE Team, you will hear a phrase we say often, "Price or Terms". This basically means the stronger the terms, the lower the acceptance price will be. In the current market, both average buyers and investors are out in the market searching for the deeply discounted deals. However, when they come head to head in an offer for the same property, most often cash will prevail.
According to National Association of Realtors researcher Jed Smith, “Even though a first-time buyer may be offering the same price as an investor, or a higher price, the investor has the edge. The investor may actually pay less, but it’s cash, right now.” We are seeing it with our own buyers and sellers. A cash transaction can eliminate things like a lender requiring approval of a condo building or an appraisal coming in too low. This makes it very tempting for the seller.
The cash sale trend continued in January when 52% of all closed transactions in Pinellas County were paid for in cash rather than through other financing means. This investor squeeze has our attention as we continue to research financing options that can make a difference when presenting a buyer's offer. It is more important than ever for a potential buyer to meet with a lender prior to starting his/her real estate search. A pre-approval letter from a lender can go a long way toward balancing the playing field.
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