Inside Tips On Beating All Cash Deals in Miami

Recently in the Miami housing market; hopeful home buyers are finding their offers increasingly declined. This is due to the rise of all cash deals being the preferred method of real estate transaction. As a result, countless borrowers are turning to creative financing deals in order to acquire the home of their dreams. What is a home buyer to do when their offer is up against an all cash competitor? Is there any hope?

In 2013 in Miami-Dade County alone, as high as 62 percent of all residential real estate negotiations had no mortgage. And for homes priced above the $800,000 dollar mark, 58 percent were all-cash sales. Compare this to only 27 percent in 2008 and we have more than a trend, we have a new way of doing business in Miami.

Why All-Cash Deals are King:

Cash deals have become the norm over the past several years, making it difficult for even well-qualified borrowers. In fact, some buyers who are putting out low bids for homes are finding themselves out of luck, when someone else steps in and pays cash. Many purchasers are choosing to borrow at a jumbo loan rate and put down 35 percent opposed to the typical 20 percent, just to be able to compete.

Another major reason that all-cash deals are the norm, stems from the 2008 real estate and stock market collapse. For many the feeling of security; knowing they paid cash for their home in today’s economy is worth paying everything upfront. For those that chose this route, knowing they will not encounter any of the same stock market upheaval also plays a major role. In addition, many condos located in hot vacation spots like Miami are still in foreclosure, and the larger banks may not want to hassle with financing a condominium; therefore choosing a cash deal to remove it from the books. So what can you do to compete in a cash deal market?

Cash deals miami

Use Your Assets:

Many home buyers are choosing to liquidate their assets in order to pay cash for a home, and then a few months down the road originate a mortgage and recoup their assets by investing again. However, purchasers who choose to finance a home still have options that include using a combination of home equity credit lines, second mortgages, and quick closings in order to beat all cash purchasers; just be sure that you use the right lender.

The following are four tips borrowers should use in a market that’s rewarding all cash deals.

1. Know the Market:

Work with an experienced real estate agent to find sellers who are open to bids that include financing or with properties with contracts that have recently fallen through. This will put the odds much higher in your favor.

2. Be Flexible:

Sometimes a home equity credit line or other form of credit can help improve your offer, it may not be all cash; but more cash is always better than less.

3. Be Patient:

Many all cash buyers will appear and disappear without warning, especially overseas purchasers. Be consistent with your offers and keep communication open. With so much activity going, patience and persistence will be your best strategies.

4. Down Payments:

Large down payments may put your bid ahead of others and get you the home you really want. The more security you can offer them in the form of cash the better, but the overall presentation of your offer will eventually be what sets you apart in the mind of the seller.

For More Information on this Post, or for More Ways to Beat Cash Deals just Click Here.

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