Current Events > WTF is the point in buying a home when someone has the money to pay it in full??

(+) Yeah! (+)

Last 4 homes I checked which were about $230K-$270K range, I offer a 50% downpayment and the realtor agent says they have a buyer that can not only pay it in full, but pay more than the asking price.

WTF

Who the hell has that much money lying around?

Maybe they sold their old house and it was worth more than the one they are moving to? Fairly common for retired couples. Their old home might have been too big for their needs after the kids moved out or too big for them to maintain.

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I get the frustration but I would do that if I could. I don't understand the question.

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Did the realtor say it was a cash offer?

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The X Dawg posted...

Who the hell has that much money lying around?

I live in CA and people do have millions of dollars laying around and are competing with other buyers who also have the same amount of money and are simply outbidding each other while not giving an opportunity to those who only saved so much for a home and would require a mortgage loan.

Ryangrad posted...

Did the realtor say it was a cash offer?

Yes, all straight cash offer. I'm also offering in cash but I'm simply being outbidded by people who have half a million in cash.

Sounds about right. Im so glad we were able to buy our house 4 years ago. It was so hard to lock down though, houses get snatched up so quickly and there are so many all cash buyers.

We lucked out that our house was being sold by a third party moving vendor that would accept the first offer at asking price. We went to see it days before an open house and made the offer same day and got it.

Since then its gone up nearly $300k in value which is crazy. The market is insanity right now.

I'm facing the same issue in the Seattle area. There aren't as many mega mansions around here but the average home price has tripled in the last six years.

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Speculation ruins everything.

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Jesus were the buyers all drug dealers?
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For the seller, how does the buyer being able to pay in cash impact them? Seems like it'd just save time due to the buyer not having to work out payment and bank stuff?
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Vermander posted...

Jesus were the buyers all drug dealers?

Yes. Their drug of choice? Capitalism. Seriously though, they're likely from a company, a foreign investor, or a retiree.

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cuh posted...

Its also foreign investors with tons of cash to spare

Thinking about buying a house in CA gives me so much anxiety Im just not gonna think about it lol

This, extremely common in Irvine or Tustin in Orange County. Less headache for the escrow company and realtor since you dont have to deal with a lender

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Just save up more money so that by the time you have the full price the market is up another 50%.

If someone buys a house fully in cash, there's a they probably plan to get a loan on the property later (many people apparently don't realize that you can do this) and there's a good chance that it's an investor. Offering to pay 100% up front with cash makes it more likely that the seller will accept the offer since there will not be a financing contingency. No financing contingency means no having to deal with banks which means the closing could happen in just a couple of days with little or no BS.

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Where money

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emblem boy posted...

For the seller, how does the buyer being able to pay in cash impact them? Seems like it'd just save time due to the buyer not having to work out payment and bank stuff?

Lenders have certain requirements. A cash offer is, theoretically, free of those restrictions. It's up to the buyer to worry about things like insurance and such. With a mortgage, the lender can demand that the appraisal be at a certain amount, that the homeowners insurance covers certain things, etc. Also, loans sometimes don't come through, even when the buyer is prequalified/approved, etc. It just happens sometimes.

Dealing with a cash buyer avoids those issues. Sellers don't like delays or uncertainty, so a cash offer can be appealing.

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PrideOfLion posted...

Fucking tell me about it. We're trying to buy a house right now and our realtor told us that new houses tend to get posted on Thursdays and are gone by Monday

Sounds right. When we were looking, any house we liked that we wanted to take a couple of days to think on was gone within a few days. I used to get annoyed with my husband because Id really like a house and he was on the fence and then it was gone. With this house, he saw it first and called me insisting I go see it that day. I went and then we made the offer immediately. It was what we wanted. The process was so stressful though. I cant even imagine buying right now. The prices are insane and competition is even higher.