In the last 6 months (February through July) there were 470 homes sold in League City. 75 of those homes sold for cash (16%).
That means that cash buyers accounted for 16% of the total League City sales for this time-frame. While it’s not a dominant niche within the market, it’s certainly large enough to be significant. And contrary to what I thought, half of the homes that sold for cash were above $250,000. But how did paying cash affect these deals, if at all?
I found out that the difference between homes that sold for cash and homes that went through the normal lending process, in terms of price, was insignificant. They were almost identical in comparison. In fact, homes that sold through a lender, on average, sold for 1% more than homes that closed with cash buyers.
That makes it clear that buyers aren’t able to get the so-called “great deal” just because they’re paying cash. This is influenced by the strong sellers-market we’re in right now. Homeowners often have multiple offers to choose from and while a cash buyer can certainly have some advantages over those getting a loan (i.e. faster closing, less prone to delays), most homeowners will go for a higher NET amount and take the loan buyer.
So the question becomes: Is finding a cash buyer for your home all that the word on the street says it is? Not unless you find a cash buyer who will bypass the appraisal process. In that situation, a cash deal makes good sense. But these days even cash buyers are still making their offer contingent on the appraisal going through. And if that’s the case it’s not that much different of a deal than if the buyer was getting a loan.
Again, cash certainly has its advantages but after seeing the price difference in comparison to loan buyers, it’s not a “cash is king” era.