Have you ever been in the middle of playing Rummy when all of a sudden the game changed to Euchre? Sounds ridiculous doesn’t it. But that’s what is happening in Tucson home buying experience. And it is a game changer.
Trump Cards in Home Buying
The game used to be:
- Get pre-approved
- Find a home
- Make an offer
- negotiate a price
- Inspection period
- etc.
The typical home was purchased with a conventional loan just 4 years ago. There were a few VA and FHA loans, and you would see maybe 3 or 4 cash transactions a month.
Not anymore, The game changer is CASH. Now more homes are closed with Cash than any other form of purchase. And the CASH buyer has a Trump card and that card is CASH!
Conventional loans typically used to take 30 days to close. Some, in rare instances were closed in less. Fast forward to today. Now a typical close is 45 days, minimum.
Now we see people making offers on homes and before the negotiating is done the seller will simply walk away. Why? someone came in with a cash offer and they accepted it.
Cash offers can close in as little as ten days. No worry about financing, loan officers, underwriters throwing a monkey wrench into the deal at the last minute, no waiting for a month and a half to get your money. Cash, quick, easy, no middleman dictating how the transaction will proceed.
Over 30 Percent of all transactions closed are closed with CASH
What does this mean to potential home buyers trying to negotiate a contract? It means you have a 30% chance that someone with a cash offer might come to the table to buy the home you want.
So, How do you compete with the Cash Trump Card?
You’ve got me real curious – who ARE all these people who are paying cash for houses? Is this a Tucson phenomena or is this countrywide? Are these mainly retired people cashing out their homes elsewhere and coming here to retire? Or investors gobbling up cheap houses for rentals? I’d love your take on this.
Deane,
I’m curious as well, but the thing is, there is no tracking for that data. One of the things about being a cash buyer, you don’t have to disclose your entire finances. You pay cash, you keep your privacy.
I’m sure there are some from each category, but I’d doubt investors are putting down their own money; most have financing. just not the typical consumer loans.
Dave