Tuesday, July 23, 2013

Home buyer tips - Does cash really matter in this market?

It was not that long ago buyers thought they could get a better deal simply because they were offering cash.  During the market run up I think these cash offers contributed significantly to the out of control prices.

Why the cash offer?  No appraisals, a quicker closing, plus they get a price discount.

Depending on the circumstances of the sale many sellers were accepting of these lower offers.

Over the past few years qualifying for a mortgage has become more challenging.  Mortgage underwriting requirements are tighter.  Now you must do more than fog a mirror to get a loan.  Many of the questionable creative loans have gone the way of the dinosaur.

More importantly, lenders are doing their homework better before providing a pre-approval. 

Any real estate agent worth their title knows to submit a pre-approval (not pre-qualification) letter with any offer.  What is the difference between a pre-approval and a pre-qualification? 

Any real estate agent worth their title knows what it takes to present a competitive offer.  And, if an offer is compete, with few strange contingencies, then a mortgage should not be a huge hurdle that would make a seller want to opt for a lower cash offer.  "What is a clean offer?"

The old cash is king fallacy still lives on and will likely die a slow death until the next cycle.

In today's market I suggest buyers get a mortgage pre-approval and work with a real estate agent to be competitive.  

Don't worry about the cash competition - for now.

Call Gary L. Waters PLLC at 321-693-3850 for your Florida real estate needs.   Florida licensed real estate agent, Serving Brevard Realty, Merritt Island, Florida.