Cash Buyers at Extremes of Market

No, I don’t have any hard data backing me up.

But anecdotally, at least, it seems like the two likeliest kinds of houses to be bought for cash these days are:

One. Bank-owned foreclosures selling for bargain-basement prices — and in such tough condition no lender would accept them as collateral; and

Two. Upper, upper bracket homes, where the Buyers’ balance sheets are so large that they are effectively immune from “the recent unpleasantness.”

As a practical matter, the only way to flag a cash purchase — at least that I’m aware of — is to look for sales where the house’s “off market” date and closing date are separated by only a few days.

Or, they’re the same date.

By contrast, when the Buyer requires a mortgage, the interval is typically at least 15 business days.

That allows time for the appraisal, underwriting, re-visiting the appraisal, etc.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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