Tag Archives: cash buyers

What Sellers Wish Buyers Knew Before Submitting an Offer

With property selling at lightening speed, sellers are in the position where they can review multiple offers. However, not all offers are created equal and some are down right off. Here are 4 things sellers hope buyers know when submitting an offer.

1- Nitpicking and nickel-and-diming will not get you a discount.

Pointing out every little stain and out-dated design will not have the seller agree to a discounted price. Sellers and seller’s agents know the difference between cosmetic issues and major concerns, and they (should) price the home accordingly. If you want to offer a certain price based on what you are going to have to do to the home, fine, but if it’s significantly less than asking and what you need to do is cosmetic, it will not be considered a serious offer by the seller. Even if you come back with a more reasonable offer, (and the property is still available) the seller may have taken your original offer personally and may decide not to work with you.

2- Giving a sad story with a sloppy offer will not impress or move a seller.

I have suggested to my buyers to write a brief letter about themselves and why they want to buy this particular property. This is a good idea when the sellers have multiple offers and the property was the seller’s home rather than a new construction from a developer. The letter gives the seller a chance to identify with you and in the best case scenario allows the seller to see you are in the same position they were in when they bought this home.

However, if your offer is incomplete (missing pre-approval letter, offer not signed, no deposit check, etc.) and you have a letter saying how you would rather be homeless than live in any other home than theirs, it could raise a red flag to the sellers and they may not want to deal with you.

Tips for Buyers from Sellers3- Making everything easy for the seller will make everything easy for the buyer.

First, have all your the paperwork signed, complete, and organized. Not every agent types the offer to purchase paperwork, which is fine as long as the offer is written clean and legible. Second, know what your timeline is but also be flexible to what the seller’s timeline is. Many sellers want to sell as soon as possible, so consider having your offer with accelerated closing dates. This will also give sellers more confidence your offer will make it to closing. Of course, paying cash will bring the most comfort, but if the buyer can have an inspection in two days, sign purchase and sale within a week, and close in 30 days, the seller may find those terms more comforting than a cash offer at a lower price.

4- Mind your manners.

Asking for a seller to fix something or give credit toward fixing something is not uncommon. Little issues are almost always found during an inspection. But do not demand to have the something done that doesn’t need to be fixed. If there is an issue, politeness and rationality goes a long way. Even beginning a request by stating, “I understand that I may asking this too late but…” or “Thank you for considering” will help your cause. As always “Please” and “Thank You” goes a long way.

5-Choose your agent wisely.

From beginning your search to closing your transaction, your agent is there with you at every step acting in your best interest. Whether you are selling a home or buying a home, your agent should be acting professionally, responsibility, and constantly communicating with you. If you are putting in an offer to purchase, your agent should make sure you have all the paperwork to sign, have the dates clear, and go over everything to make sure you know what you are offering. I have written this many times, but it bears repeating, buying property and selling property is emotional. Anything that involves egos, memory, and money will be emotional, real estate transactions involve all of these with multiple parties. As your Realtor, it is our job to represent your best interests and keep emotions calm. Many of the tips I’ve written above can and should be explained by your Realtor, so it is very important to work with a Realtor you trust and who will represent you in the best possible light.

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Cash Buyers Make Up Over 50% of Boston Property Sales

A couple weeks ago, I ran across the stat that 38% of recent real estate transactions nationally were paid in cash compared to the 18-20% of residential real estate transactions usually paid in cash. I posted the stat to my social media channels and this led to a dialogue with a couple of people about what we could take from the stat.

One commenter”s opinion was the increase was the result of foreclosures. His logic revolved around prices having fallen to a level within reach of larger number of peoples’ savings. I said I’d see if I could find some additional statistics breaking down the numbers by location and purchase price.

The rise in real estate transactions paid in cash can be attributed to investors buying distressed property (short sales and foreclosures) in some parts of the country, but it is not the only factor.

The downtown neighborhoods of Boston, which made it through the housing crisis relatively unscathed, have seen cash transactions make up over 50% of all real estate transactions so far this year. The increase in home buyers paying cash has increased each year since the housing crash, from 28% of all real estate transactions in 2008, to 29% in 2009, 31% in 2010, up to 48% in 2011.

In Boston, cash buyers are not uncommon at higher prices. The percentages vary, but cash transactions make up a large percentage of the city’s high-end sales. Boston’s most expensive real estate transaction in the last year, a penthouse at the Mandarin Oriental, was bought in June for $13.2 million in cash.

Wealthy investors looking for a place to invest excess cash gravitate toward real estate as the stock market remains volatile. Property in Boston appears safe in comparison, especially since it is a market that has remained steady during the economic turmoil.

The view of Boston property as a safe investment has also attracted international investors. A recent study found 50 percent of real estate investment is concentrated in 30 cities and Boston ranked 18th on the list; considering Boston’s geographic size, this is オンライン カジノ a significant statistic. Canada, China, Brazil, Russia, and Europe are all sources of buyers because they view property in the United States as a safe investment. These foreign investors are cash buyers out of necessity because they do not qualify for financing without credit history established within the States.

Real estate transactions paid in cash are on the riseForeign buyers have been buying investment property at all price points and these overseas investors are one reason we are seeing cash transactions across the purchase price spectrum. The mid-price and lower-price real estate transactions in Boston have not been cash purchases historically. This unusual activity is the main reason cash transactions have made up over 50% of all real estate sales this year.

Tightened lending regulations have also contributed to the historically high percentage of cash buyers in Boston. More buyers are having difficulty obtaining financing, but even if a homebuyer has no problem getting financing, the property may present challenges because lenders deem it non-warrantable. Some common reasons for lenders to refuse financing are low owner occupancy (under 50%) in a building, too large of a commercial interest (over 20%) in a condo association, ongoing litigation, low pre-sale in a development, a home owners” association with budgeted reserve allocation less than 10% of operating revenues, and an appraisal price being too far below the proposed purchase price of a property. A cash purchase is often the only option if a property meets one of these criteria.

Buyers capable of making a cash offer are aware of the current lending environment. These buyers know they can often secure a favorable deal because sellers who have seen transactions fall apart because of financing might take a lower price rather than try their luck with a buyer seeking financing.

Two other factors contributing to the rise in cash transactions are empty-nesters and “kiddie condos.” Baby boomers who have been downsizing and looking for a more walk-centric lifestyle are buying Boston condos with profits from selling their suburban homes. Another demographic of cash buyer is affluent parents buying “kiddie condos” for their children who are attending one of Boston’s universities since the current market is shifting toward buying being more affordable than renting for the same period.

The market continues to improve and not only for those who can afford to pay cash. For a more detailed explanation of current real estate market trends in Boston, to discuss the ramifications of cash versus lender financing, or to explore if investment property is right for you, contact the Realtors of Matthew and Alisa Group Real Estate.

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