Cash is King

8 11 2010

Did you know that cash was the #1 financing type for real estate purchases in September?  This was the first time in the history of the Campbell/IMF survey that cash buyers were the largest group of buyers in the market. 

Why did this happen, and how does it affect you?

Cash is king now for two reasons: getting financing for distressed properties is tough, and there are less first-time homebuyers in the market now. 

Many of the “best deals” on distressed properties (ie. the ugliest homes) go to cash buyers, who can close quickly and not have to worry about negotiating and completing financing-required repairs.  Let’s face it, banks are in the business of lending money.  They don’t want to spend money to repair properties that are not currently bringing in money.

And secondly, since the tax credit expired, the number of first time homebuyers has fallen. 

This is a huge paradigm shift in how we in America view debt– rates are at their lowest ever, but the most active group of buyers are using cash. 

How do you think this will affect you when you plan to sell? 

For the full article from HSH, click HERE.

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