Certain areas and certain price points of the Alexandria, VA housing market are pretty hot right now.
Inventory is tight, buyers are plentiful and if you're trying to get into a property in the $500,000 - 700,000 price point right now in Old Town Alexandria that is in decent condition and priced properly, well, you can count on competition. Lately, on average, we are seeing no fewer than 3 offers and typically around 6 offers in this price point.
Under other circumstances, a cash offer and a quick closing, with no appraisal contingency, is usually very attractive and may even mean the buyer can offer a little less than full list.
If you're shopping in certain price points in Old Town Alexandria, though, where the average sales to list price ratio in August, which is typically our slowest month, is 97.4%, then cash isn't going to change the price much. In fact, when you are in competition, it is not going to change the price at all - you still will more than likely have to escalate beyond the list price in order to prevail.
At the end of the day, it's ALL cash to the Seller, no matter the source of the funds, whether the offer is VA, FHA or conventional.
Obviously, there ARE a lot of advantages to a cash purchase, and I don't mean to imply otherwise, but when Sellers are looking at their bottom line, more often than not, they want to net as much as possible from the transaction. Often, Sellers don't even care about the many advantages of a cash offer, they only care about what they're putting in the bank. They are happy to wait another couple of weeks if it means their net is higher.
As agents, we like cash offers because you eliminate the inherent risks of financed offers, although I will be honest here...as a listing agent, in 14 years I have only had one offer fall through due to financing and we knew it was questionable from the start, but the Seller agreed to give it a chance. I've never had a buyer fall through on a transaction due to financing.
Sure, with cash you can eliminate the appraisal contingency, although plenty of folks in competitive situations do that, anyway, because that is often what it takes to prevail. As long as the Buyers have enough cash to compensate for a low appraisal, again, it just isn't much of a factor.
Offers with escalation clauses, no financing and no appraisal contingencies, as well as no home inspection contingencies - except, maybe with the right to void but no repair requests - are not uncommon these days in Old Town Alexandria, particularly in the $500,000 - $700,000 price range.
Inventory is so low that when a Buyer says "I'm paying cash, how much off the list price can I expect?" we just mentally shrug and proceed to educate them on the realities of the Old Town Alexandria housing market. There are other terms that may be more important to sellers than whether or not the buyer is paying cash. In other words, there are plenty of ways to beat a cash offer.
Especially for first time home buyers or folks from outside the area, it can be tough to understand what it takes to buy a home in certain neighborhoods, but this charming 18th Century town, located on the beautiful Potomac River is home to many historically significant homes on tree-lined cobblestone streets, terrific restaurants and shopping, which makes it highly desirable to many folks - which, in turn, when inventory is low, creates a challenging environment for the home buyer.
There are ways to be successful in competition for an Old Town Alexandria home, but it takes an agent who is experienced in writing winning offers in a highly competitive environment and who keeps their pulse on the Old Town market. If you're thinking of buying in Old Town, get in touch and we'll do what we can to insure you write a winning offer.