The upturn of all-cash deals have made it pretty hard for homebuyers that plan to make use of a mortgage. Many mortgagors are seeking lenders who are able to quickly close loans.
In Miami-Dade County, for instance, more than 60% of all real estate sales that were closed in 2013 had no mortgage. All-cash sales for homes priced $800,000 and above in Miami-Dade constituted nearly 60% of the total sales within that price range.
In 2013 nationwide, about 30% of residential real estate sales were all-cash. Some buyers had to vie to buy houses. Buyers who used mortgage financing were outrun by clients able to make all-cash offers. Naturally, sellers could not reasonably refuse cash. These deals became customary, particularly for condos, making it very hard for even well qualified jumbo borrowers. It has become an intense all-cash market that makes it difficult for a lot of people to participate in the home buying process.
Furthermore, a lot of condos in vacation locations such as Las Vegas and Miami are still in foreclosure or court, and banks might not want the trouble of financing a condo.
Several buyers are choosing to sell off assets and pay for properties, only to regain their assets by investing again in a few months’ time through a mortgage—the odds are quite good. Also, buyers that need to finance the purchase of a home are not left out as they can close jumbo loans in a matter of days using home equity lines of credit, second mortgages, and quick closings to beat all-cash buyers—options are always available provided you go to the right lender.
Use flexibility to your advantage
Occasionally, a home equity line of credit or a line of credit can help make your offer appear more presentable. You may not be all to do it all but more-cash is definitely preferable to less.
Understanding the housing market where you are will work wonders for your home buying fortune. Work with your loan officer and real estate agent to discover sellers that are agreeable to take offers with financing.
Homebuyers who cannot pay all cash must persevere with sellers, even if it means making several offers. Certain buyers’ offers can become less appetizing to sellers, particularly if the buyer is abroad. So your financed offer can still stand a chance—especially if you are prepared to include a sizeable down payment.
Source Material: Market Watch