According to NAR's report (4/28/2011) on pending sales of existing homes, 35% of the deals getting done are with cash. What does this mean? In our opinion, it means that about 1 out of every 3 homes sold are bought by individuals or professionals for investment or redevelopment. Short-term (flipping, rehab) and long-term (rental, new construction) are both viable purchasing strategies that are driving these high numbers of “for-cash” transactions.
Teardowns in general are mostly cash deals (about 80%), whether by individual buying to build their own custom home or by professional for his own account (speculation). There are two factors that support this:
1. Financing products for this type of purchase are scarce.
2. The buyers of this property type, whether pro or individual are usually well capitalized.
So, if you’re selling this type of property, chances are you won’t have to worry about what is arguably the biggest drag on the housing market – the ability for your buyer to find the money to buy. Today, cash is king!