All Cash Offers Incredibility Common
All cash offer purchases for homes occur more frequently than you might expect. The actual percentage of all cash offer occurrences in Chicago for 2013 is up to thirty four percent, which is a very large percentage of home purchases in Chicago. For the month of June, real estate purchases in Chicago that were paid for with cash accounted for thirty percent of all purchases. This percentage correlates with the national average and shows that all cash offer options are gaining popularity nationwide.
Most individuals that purchase real estate with cash offers are investors. Investors can be broken into two main groups that are described as large corporations or individuals with fewer resources. However, many realtors claim that many of the homes purchased with cash are not investment properties and are simply end-user purchases, which make the phenomenon of cash only offers more intriguing.
One of the most significant end-user real estate purchases that was done solely with an all cash offer includes the sale of an Evanston lakefront mansion that was purchased for just under 4 million in cash. Another home located in Bucktown was purchased for $1.2 million in cash during the month of May. Many real estate agents have also reported all cash purchases on many homes that are priced in the upper 500,000 price range. Whelan, a prominent Chicago real estate agent, has stated that three of the eight purchases he was involved with in July were cash only transactions.
Although this phenomenon of cash purchases has been recognized, the reasons for cash only offers are more diverse, but many include:
• Cash only purchases want to be the most uncomplicated offer and have the most direct lane to a purchase. Without requiring financing, these cash purchases can be completed quickly and are the ideal option for most sellers.
• Cash buyers understand that sellers are willing to take lower offers from purchases that are prepared to pay in cash only.
• Another benefit of an all cash offer allows individuals or investors to avoid mortgage appraisal, which is advantageous for many buyers and sellers. Many times houses have problems appraising if they are superior to other houses in the neighborhood.
• Actually qualifying and being accepted for large loans has dropped off in recent years and cash purchases are the only alternative for individuals that don’t qualify for loans.
This makes competing with all cash offers difficult if you are a traditional buyer. If you are pre-approved for a mortgage and you are competing against a cash buyer with a comparable offer price, you may look to win the lottery in order to compete with the all cash offers. The old saying that cash is king is very true.
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