Homebuyers who make offers in all cash have a far better chance of winning bidding wars, according to a new study. In an analysis of the current hyper-competitive home buying market, Redfin tracked the frequency of how often cash buyers secured the property they wanted compared to those financing. It found that waiving financing contingencies when making an offer on a home increase a buyer's chances by as much as 66 percent.
But experts warn that cash buyers still shouldn’t expect a discount.
“All-cash offers are usually an effective bidding war strategy, but the market is so hot that even the number-one strategy has evolved this year,” said Orlando Redfin agent Nicole Dege. “All-cash buyers used to be able to go in a little below list price, but now I’m seeing a lot of cash offers that are at list price or higher. Anything below list price, regardless of the terms, just can’t compete.”
Meanwhile those looking to finance their new home will find conforming no-point 30-year fixed mortgage rates are averaging 3.0 percent and 15-year rates are near 2.375 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.