Does Cash always win?

Real Estate Agent with Marshall Team - Remax Results

Do you feel like "Cash is King"?  We have heard this terminology virtually all our lives.  I would have been someone that continually agreed with this statement until the past few years.  In our current housing market I can't say I agree with this claim.  Sellers are more apt to be looking at Net gains versus ease of transaction.  I feel every agent you'll talk to will tell you governmental funding "i.e FHA, USDA, VA" has taken a back seat to conventional or cash transactions.  However, conventional lending is by far the most widely accepted term for home buyers over the past few years.  With most markets selling for above asking prices buyers are forced to either purchase a home that is marketed well below their budget or to bring "Cash" to the table. By "Cash" I'm referring to going above market value and waving some or all of the appraisal contingency.  Is this a good practice? I lean towards no but if your client is set on purchasing the home that checks most their boxes it may be a must.  How long will this practice last? With a supply shortage of available property for sale on the market it is a hard one to tell.  It has been projected we are in for another 18-24 months of real estate markets similar to 2019-2021. 

Worse part about the current market is our Veteran financing has taken a back seat to everything. Similar to FHA financing with the appraisal not being able to be waived the VA loan typically comes at 100% financing.  That's GREAT if you're the one purchasing the property; however, most sellers look at it as the buyer not having any money to cover additional costs that maybe required to ultimately get the sale to the closing table.   How can we support our troops if we are unwilling to work with them on purchasing a home for their families?


Comments (2)

Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Justin and Thank You for the great information here in the Rain.  Make it a great day!



Apr 25, 2022 01:50 PM
Justin Marshall

Will appreciate the compliment. Just want to give my view and opinion on what I'm seeing as a market.

Apr 25, 2022 01:53 PM
Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

No, but cash is enticing. A non cash buyer can overcome cash if they know what the Seller wants.

A mortgage buyer can overcome a cash offer by:

1. Higher price

2. Longer length of close that helps a Seller

3. Appraisal waiver (if sufficient down payment)

4. Willing to live in home and not flip

5. Pay Seller closing costs

6. Veteran buying from a Veteran

7. Ask the Seller what would make a perfect offer and try to meet those requests

Apr 25, 2022 05:29 PM
Justin Marshall

Jeff absolutely agree.  As long as the buyer has the additional capitol to overcome the gaps/contingencies and make things easier on the seller I feel financing is the best win.  It allows most buyers to have a larger budget since they are only utilizing the Cash for above appraisal costs.

Apr 26, 2022 01:20 PM