In many real estate markets throughout the country, bidding wars have not only increased in popularity but they have even become the norm. In markets such as South Florida, it has become increasingly difficult to compete in the home buying market if you are not a cash buyer. With many Americans opting to leave states with higher costs of living, restrictive mandates, and moving to The Sunshine State, the competition for homes has reached record levels.
A look at the data
Did you know? Nearly one in three homes last year were purchased with all cash. To further underscore the importance of cash, buyers armed with a cash offer are going under contract nearly seven times faster than financed buyers. On average, cash buyers are making 1.1 offers before winning a bid on a house. In contrast, buyers obtaining conventional financing are making an average of 7 offers before winning a bid.
If these advantages for cash buyers were not enough, new data indicates that cash buyers even pay less for homes. According to a new study out of the University of California-San Diego, cash buyers have paid 11% less than buyers obtaining a mortgage. For perspective, the median-priced home sold today in the U.S. is $400,000. Therefore, cash buyers are saving an average of $44,000 on median-priced home purchases.
Florida has become the top relocation destination for Americans over the past few years. In fact, nearly 1/3 of all Americans visited Florida during 2021. Although many of these visits were for vacation, many others were to scout a new home in paradise. If you are a home buyer obtaining a mortgage, it is more important than ever to act swiftly when a new listing hits the market. As always, a dependable team consisting of a real estate agent, mortgage broker, and real estate attorney is extremely important. It is also important to remember that you can never save too much for a home purchase. Although a 20% down payment may allow you to avoid paying property mortgage insurance (PMI), the larger the down payment the more favorably a seller will view the offer.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!