Cash Home Financing: What You Need To Know



“Money is king” when it comes to home buying, Chief Economist Fannie Mae. Doug Duncan– he said in a recent interview with National Mortgage News, and in 2021 statistics show that this is so.

Evidence is evident in the rise in the number of cash offers new purchases, according to Gay Cororaton, senior economist and director of housing and commercial research at the National Association of Realtors. While there is nothing new in buyers paying for a new home in cash, there has been a marked increase in the first half of 2021.

“The offer is very limited. Cash offers are what sellers prefer just because the deal will close faster – you don’t need to go through an assessment. So we are seeing about 25% tracking, ”she said.

In another recently released analysis of county government records by Redfin, data similarly showed that all-cash offers accounted for over 30% of home purchases in the first four months of the year.

Supply chain problems and stock shortages pushed prices towards record highs this year and made betting wars commonplace, often offering prices well above the original list price. If a year ago a house on the market could receive two or three offers, now, according to Cororaton, there are on average about five of them.

To help buyers who don’t have the capital to make a cash purchase, a number of businesses and programs have emerged that offer customers the opportunity to compete by buying homes on their behalf and then reselling or transferring properties to them in the same way. price. If current buying trends continue, these types of companies and products are likely to capture a large portion of the market.

“Before you know that, I think every offer must be a cash offer. Sellers will require people to bring cash offers because it lowers their risk, ”said Tim Herman, co-founder and CEO of UpEquity, an Austin-based mortgage technology platform that provides buyers with the means to complete these transactions.

No two programs serve customers in the same way, but they were designed with the same goals. Here are a few things to know about the products and whoever offers them.


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