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Who Wears the Crown?

The real estate agent warned my clients to stop rejecting every demand the buyers made, advising that these cash buyers were actually overlooking issues that might give a mortgage lender reason to quash a deal. Of course, my clients wanted to know what I thought:  was a cash buyer as rare as the agent made it seem?

I told them that I‘ve seen a lot more cash buyers in the past few years than I had seen in my long career. I found a stat showing home sales increased by 44% since 2010, while mortgage applications only rose 16%, which means sellers are making deals with lots of cash-laden investors and home buyers who don’t need to finance a purchase.

All that being said, however, how much would it cost the sellers to do the revisions the cash buyers wanted? The answer was “about $2,000,” making my advice a legal no-brainer. If they rolled the dice and waited for another buyer, they might get another cash buyer, or they might not. But either way, the sellers would never close as fast as they could with this deal, and they’d be spend at least $2,000 in mortgage and taxes while waiting.

When they real estate agent heard that my clients would give the buyers $2,000 off the price in exchange for a quick closing, I’m told that she “cackled” and remarked, “I told you, cash is still king!”

I prefer to think that logic is king, but cash can certainly be the prince.

Happy spring!

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