Are cash sales the new norm?!?
Well, not really but they certainly are not the surprise that they used to be. Even with mortgage rates at still record lows many buyers are electing to put cash that is earning virtually nothing into their real estate investments instead. It is interesting to note that these buyers usually think that cash talks in negotiations. That isn’t really quite the case either. If you think it through a seller really doesn’t care if you are paying cash or getting a loan. The amount they net from a sale isn’t really affected. If you happened to have two offers that were about the same, of course, the cash offer would win out because you don’t have any of the questions or complications of the loan process. It certainly is a more secure and clear path to a closing to have cash but the ALL CASH sale doesn’t have any more benefit than that to the seller.
So, cash does talk. It just doesn’t speak quite as loud as a buyer might like to think. I have had several listings with multiple offers on them this week. Two of them had cash offers in them. In one case it was a decisive issue as basically the offers were about the same except for the financing so the cash offer won out. The 2nd transaction had the cash offer come in lower and while that one is still being negotiated as I write the blog it appears that it is going to be purchased by one of the offers with financing in it as the price was higher.