WHY PURCHASE USING CASH WHEN INTEREST RATES ARE SO LOW?

Todays question was from a potential buyer wondering why a buyer would purchase using cash rather than just getting a mortgage as interest rates are so low. The top reasons are speed of the transaction and ability to purchase properties where mortgages can not be obtained on them as they may need too much work.  With cash the buyer can close in 7-14 days as opposed to a 45 day average for obtaining a mortgage.

Sellers will usually choose cash offers over an offer with contingincies as the cash sale is final, the buyer has no contingincies and the seller has a better chance knowing it is going to close where as the buyer with the mortgage can back out if the house doesnt appraise or if the bank declines them or decline the property iteself for needing too much work.

These buyers can then finance their home after closing on their on and have at their own pace. They can either fix and sell the property or fix and refinace the property putting the cash back in their account and moving onto to purchase another property.

Cash is king afterall but the important lesson to all buyers is to limit or eliminate contingincies if you are getting a mortgage and want your offer to be as strong and have a chance against these cash buyers.
 If you are a potential buyer and have the ability to get a mortgage, you will enjoy the lowest rates in decades and be able to purchase a home at rock bottom prices.

PLEASE SEE MY BLOG WITH TIPS ON BUYING A BANK OWNED HOME

http://www.trulia.com/blog/scott_godzyk/2008/08/so_you_want_to_buy_a_for

PLEASE SEE MY BLOG WITH TIPS ON GETTING A MORTGAGE IN TODAYS MARKET

http://www.trulia.com/blog/scott_godzyk/2010/05/secrets_to_getting_a_mortgage_today

Updated Oct. 14, 2010

Blog Written by:

Scott Godzyk
Owner/Broker
Godzyk Realty Group

One of New Hampshire's Leading REO Brokers

www.ScottSellsNH.com