Statistics show that 5.34 million existing homes were sold in 2019. Most of the people who are selling their homes nowadays are opting to sell for cash. As a result, the cash-for-homes market is growing each day. In this article, we look at some reasons why the cash-for-homes market is booming.
Cash-For-Homes is More Lucrative For Sellers
More sellers are starting to find cash offers more appealing by the day. With cash home buyers, there is a reduced risk of the deal failing to go through. Also, a cash-for-home deal usually closes way faster than a mortgage-contingent offer.
It puts a seller in a more comfortable position to know with certainty that they have a done deal. Even if cash buyers might still want to inspect before they make a purchase, their deals are not contingent on the approval of mortgage financing. This means that cash deals are largely dependent on the buyer and seller reaching an agreement than anything else. As such, these deals have fewer variables and fewer factors that might contribute to the deal not going through.
There’s More Cash Going Around
Cash used to be king. Home buyers who had cash in hand used to offer lower prices than the asking price because of the convenience and appeal of the cash-for-home deal. However, nowadays, there are a lot of cash buyers. This means that even if you have cash, you may not be the leader of the pack. That competition means it will be difficult for a buyer to offer a lower amount just because they have cash.
One might wonder where all the cash is coming from. In the past few years, there has been a rise in sudden ‘wealth events’ due to money from IPOs, cryptocurrency, and sales of companies. All of a sudden, so many people have a lot of money to spend.
The cash-for-homes market is mainly booming because of the lack of contingencies. There is always that security of knowing that home buyers can sign the offer and complete the entire deal within a week. Even if the cash offers might be lower than the asking price, that alone is worth the price difference.