First Time Home Buyers vs. Cash Investors
It is evident to all that the record low prices and government tax incentives are driving buyers in the Florida residential real estate highway down the fast lane. The question is, what are you driving? Cash Investors in GREEN bring quick close deals and fewer appraisal issues. First Time Home Buyers in RED can be halted by financing delays, appraisal re-negotiations and FHA inspections or repairs.
Both first-time buyers as well as investors are taking advantage of the deeply discounted short sales and foreclosures so prominent in our Central Florida market. However, both are not being received equally. “Even though a first-time buyer may be offering the same price as an investor, or a higher price, the investor has the edge,” states Jed Smith, a National Association of Realtors® researcher. “The investor may actually pay less, but it’s cash, right now.”
Because lenders might refuse to approve a deal after inspection or appraisal, the financed offer holds more inherent risks to the seller. Therefore, they may be willing to accept slightly less for the more solid cash deal.
According the the article posted on Florida Realtors® website, “
Investors squeezing out homebuyers by paying cash,” we have seen a 6% increase in the share of resale homes bought entirely with cash from December 2009 to December 2010. In areas where foreclosure properties account for the largest market share, cash is even more important.
First-time home buyers, just consider the race that you are driving when it comes time to put in your offer and just keeping speeding forward. Don’t underestimate the value of a knowledgeable Realtor® in the car.