Everyone is paying cash for houses, right? If you need a mortgage shouldn’t you just stop looking? I thought I'd share some home buying tips & advice and how to win bidding wars against cash buyers
I have some buyers I’m working with moving here from another state. They are members of some housing related Facebook groups and recently called me in a panic, even to a point they were thinking about putting off their move entirely. They said someone posted in one of the groups that they had put in several offers on homes but got beat out by all cash offers every time.
In response to this I gotta say…. The internet is full of a boatload of very bad advice and information on just about every topic there is. Real estate is no different. I spend a lot of my time talking home buyers and home sellers off the “give up” ledge because they read something online or someone told them something that was inaccurate, misleading or completely false.
What’s concerning with people making broad statements online about their home buying experience is they most likely don’t know or didn’t share all the facts. Maybe the discouraged buyer just thinks they are getting beat out by all cash offers. Maybe they were submitting offers that were too low. Maybe they asked for closing costs assistance or other concessions that lowered the net profit for the seller. Maybe they needed to close too soon or needed an extended closing. Or maybe, they had a contingency that they had to sell their current house first.
Sure it’s true to a point, cash offers are sometimes better than those that have a mortgage tied to them. However, it’s not the end all beat all like you might be lead to believe.
Keep in mind, all real estate is local. Very local. Even down to neighborhood.. so what might be going on in one area might be completely different in another.
Let me share some numbers and data as it relates to the area I work in which is North East Florida. That covers about 5 counties and includes Jacksonville and the beaches, St Augustine, Orange Park, and Fernandina Beach.
Last month 3132 residential properties sold. Only 984 of them were bought with cash. That means home buyers that needed a mortgage made up more than 2 thirds of the properties that sold in my area last month.
In the end the home seller is going to get cash anyway, figuratively, no matter if the buyers are getting a mortgage or not. The only difference really is that cash offers do not have financing contingencies or appraisals involved and the risk to the seller that the transaction will not close is much less. If you need a mortgage to purchase a home you are very normal in todays real estate market. Most people do. Cash or not it’s a tough market for all home buyers right now. Inventory is low, building materials are scarce and demand is high. Don’t let these factors discourage you from buying right now. We are currently in a strong sellers market… it will come to an end at some point, I promise. But we face hurdles, different hurdles no matter what market we are in whether it’s a Sellers market, buyers market or a balanced market.
Some words of advice for all you home buyers out there. Stay off the internet. Take well intended advice from friends and family with a grain of salt. Most news outlets give real estate market statistics on a Nationwide level. Like I mentioned before, all real estate is local. In other words… The Jacksonville real estate market is much different than say the Miami real estate market. The Florida real estate market is much different than the Montana real estate market. We have neighborhoods in Jacksonville where the markets are different. And this is not unique to any city.
Real quick…. Before I share my next piece of advice do me a favor and click on the like button. It takes a split second to do but helps me tremendously on social media platforms especially if you’re watching on YouTube.
Find a good, experienced agent in the market you are moving to. They will be able to guide you in how sweeten your offer to beat out cash offers and any others for matter. I mentioned find a good experienced agent. In the northeast Florida board of Realtors there are 12,000 or more agents. Any one of them can open up a door to show you a house. Very few have experience working through different types of markets. Even though it doesn’t cost you to use a Realtor when buying a house, a little due diligence can go a long way in saving you time, frustration and headaches. If you contact an agent to see homes and they don’t offer consultation, in person or online you may want to reconsider moving forward with that agent. It’s a sure sign they don’t have your best interest at heart. A consultation when done correctly will allow the agent to define your goals, wants needs and desires while at the same time allow you to ask them questions and discover if you really want to work with them.
If you need to buy or sell a house in Jacksonville or northeast Florida Cindy & I are happy to help you personally. If you are anywhere else in the country we are happy to connect you with an experienced agent in your area.
I’m Mike Jones Jacksonvilles Voice of real estate…. Thank you for watching