The Truth About Cash Buyers

We have been getting a lot of feedback from real estate agents on the difficulty of securing buyers for purchase transactions. So we decided to address this topic. Since there are more Buyers today than there are Sellers, the challenge of having an accepted offer can be rather difficult. This is not the norm on a national level but in Southern California, particularly Los Angeles, Orange and San Francisco Counties there have been an increase in double-digit offers for certain property types.

Having multiple-offers in a competitive market is not uncommon, in fact, it is almost a norm. When rates have been at an all-time low and home values have been hit due to our economic collapse, what you have is a perfect storm. This storm brings out investors, first-time home buyers and transitional buyers that are taking advantage of the market. There has been a great deal of cash buyers (mostly investors) that have been presenting offers on numerous homes. An all-cash offer does not mean you are presented with the best offer. This just means the buyer does not need remove the financing contingency in the purchase contract. There is still a due-diligence, inspection and discovery period that the buyer needs to perform. Typically, a full-cash offer is structured for a 15 Day escrow.

As an active lending professional, we face these challenges daily. However, we have competed against numerous cash-offers and have closed many transactions as a result. Not all cash-buyers will be loyal. Chances are they are making offers on other properties as they understand the competitive nature of the market. Also, lenders understand the value of the customer experience. There are plenty of lenders that can offer great rates and service. Some can even close loans in as little as 15 days. This competes against many full-cash offers. It’s important to remember as a consumer that there are properties out there and professionals who are willing to make it easier to get your offer accepted.