Does the Ability to Pay Cash for a Home Purchase Matter?

By
Real Estate Agent with www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 228209

Does the Ability to Pay Cash for a Home Purchase Matter During this Strong Sellers Market?

 

Of course it does! It matters a LOT! We used to proclaim that ‘Cash is KING’ and sellers were all over the cash Offers - even lower than list prices were coveted. Sellers knew that buyers obtaining a mortgage could easily have an issue during the lending process - small or complicated - and the deal was toast. Sellers had to start all over again and then struggled to get anywhere near their list price again. So, cash WAS king! 

 

The market slowly began to stabilize and mortgage requirements were stricter and pre-approval letters were strong. Buyers submitting Offers with a mortgage option were on a more level playing ground than cash buyers. Then, cash buyers offering sub-list prices were no longer overly appealing; sellers knew buyers with mortgages were also going to get to Closing - and often they offered the higher prices!

 

Cash buyers realized they needed to compete and now, we’ve come full circle with the king of the buyers being cash - and lots of it! They are competing with the best of the buyers obtaining mortgages, waiving appraisals. 

 

How much does the ability to pay cash for a home purchase matter in 2021?  Homebuyers who make all-cash Offers improve their chances of winning a bidding war a whopping 290%. Our market is so competitive that any sub-list (or ‘lowball’) Offers in a multiple-offer situation will almost certainly fall to the bottom of the stack of Offers!  Most cash buyers now know that they have to come in strong - and most savvy cash buyers DO!

 

As long as inventory is this low, cash will be king.  So, let’s talk with your lender

 

If buying a home is in your plans this spring, it’s time to start the process. Get a jump on the homes hitting the spring market in Charlotte and then give me a call - (704) 491-3310. 

 

© Debe Maxwell | The Maxwell House Group | RE/MAX Executive | CharlotteBroker@icloud.com | Does the Ability to Pay Cash for a Home Purchase Matter During this Strong Sellers Market?

Comments (14)

Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

Cash is King here in Phoenix also Debe Maxwell, CRS. A buyer's appraisal from the lender is a real concern these days with home prices rising 25% in one year in the Phoenix metro. Jeff

May 12, 2021 10:01 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Debe, when we had the 2007/2008 meltdown all deals were cash.... then fast forward to today, if I get an offer close to asking price all cash with Proof of Funds vs an above asking price loan with questionable terms... guess which offers we will take?:) Yes the all cash offer because my sellers listen to good advice, Endre

May 12, 2021 10:02 PM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Bingo, Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI! There are alternatives if you don't want to deplete your cash (refinancing). If you want to win, cash is definitely speaking right now!

May 12, 2021 10:05 PM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Those cash deals are beating the pants off of those who are getting mortgages - everywhere we turn, Endre Barath, Jr. If you can pay cash and later re-finance, you've definitely got a leg-up on the competition! 

And, of COURSE you give that sage advice, Endre - I wouldn't expect anything less!

May 12, 2021 10:07 PM
James Dray
Fathom Realty - Bentonville, AR
Exceptional Agents, Outstanding Results

Morning Debe.

As they say cash is king.  It works for everywhere and everyone.

May 13, 2021 12:35 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Debe -  as long as the proof of funds are there then cash is king.

May 13, 2021 03:44 AM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

Cash is definitely still important - it does take some of the uncertainties (appraisal, mortgage completion) out of the picture!

May 13, 2021 05:51 AM
Brian England
Vacasa - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Cash is definitely still king and I always feel bad for buyers that need a loan and realistically can't come out of pocket an extra $25-50K in order to compete.

May 13, 2021 05:54 AM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Hi James Dray - definitely! It's the law of the land!

May 13, 2021 10:30 AM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

You know, it seems that every luxury seller is now asking for POF before showings, Grant Schneider. I just want to tell them that we'll give you that when we Offer and furthermore, they wouldn't be in my car if they didn't qualify! LOL

May 13, 2021 10:31 AM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

It does, indeed, Kat Palmiotti! For our sellers, that cash Offer may not be the highest bid but, with the appraisal contingency removed, it gives them the security they need to move to the next stage in their process.

May 13, 2021 10:33 AM
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

I am going through that right now with multiple buyers, Brian England. It's so heart-breaking for them. I can't WAIT until these cash buyers are all flushed out!! It WILL happen - it's just a matter of time.

May 13, 2021 10:34 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Debe my borrowers are losing out to cash offers left & right.  So yes all cash offers have a big advantage around here.

May 13, 2021 02:15 PM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Debe - the always-reliable "it depends" answer is once again a favorite for a reason when addressing the ability to pay all cash as difference-maker in real estate.  Because it does. . .  

May 14, 2021 06:12 PM