August 30th, 2013 categories: Chicago Real Estate News
Want to stand out from other buyers competing for the dream home that you want to nab? Pay for it in cash.
It’s no surprise that sellers prefer cash buyers to all other buyers. Mortgage loans can fall through. Buyers who are able to buy a home with cash, though? They don’t.
You might think that cash buyers are rare in Chicago. After all, who can afford to plunk down $200,000, $300,000 or much more in cash to purchase a condo in Lincoln Park or a single-family home in Bucktown? Well, more people than you might think.
A recent story on the Deal Estate blog by Chicago Magazine real estate writer Dennis Rodkin found that a surprisingly large number of buyers pay cash for Chicago residences these days.
Rodkin writes that in the first half of 2013, buyers paid cash for 34% of all the homes sold in the Chicago area. Rodkin gets that figure from numbers that online foreclosure site RealtyTrac gave to Chicago Magazine. In June, buyers paid for their Chicago-area homes with cash 30% of the time. That figure, by the way, is equal to the national average.
Many cash buyers are investors. But Rodkin writes that a growing number of regular folks – people buying a home in which they’ll live – are relying on cash to buy, too.
There’s a reason for this: There remains a shortage of condominiums and single-family homes for sale in Chicago. This means that many solid properties attract multiple bidders. One way for buyers to beat out these competitors is to offer cash for a home. There is less risk for sellers when they accept an offer from a cash buyer. Even those buyers pre-approved for a mortgage loan might see their financing fall apart at the last minute as a result of a faulty or low appraisal among a myriad of other reasons
For sellers, then, a cash buyer represents a sure thing.
Of course, the vast majority of buyers will still have to rely on mortgage financing to purchase a Chicago condo or single-family home. So if you can’t scrape up hundreds of thousands of dollars in cash to buy your dream home, don’t feel bad: You can still compete in most cases.