Bank owned homes for sale are being sold off to cash buyers across the country, based on reports from members of the National Association of Realtors and homebuyers.
According to realtors, about 22 percent of all pre-owned homes sold across the country in December last year were purchased fully in cash, an increase of 16 percent from the percentage in December 2008. The 22-percent level was the highest since the months of March and April 2009, when cash home purchases accounted for 30 percent of home sales.
The percentage of cash purchases was even higher in places where foreclosure numbers are high and where house prices have fallen deeply. In Phoenix and Las Vegas, where foreclosures accounted for over 50 percent of sales of pre-owned homes in December last year, cash purchases dominated sales.
In foreclosure-chart-topping Las Vegas, cash home purchases comprised almost 46 percent of all home sales in December last year, an increase of 33 percent from sales in December 2008.
In Miami, the tenth hardest hit metro area, cash purchases accounted for 54 percent of home sales, marking an eight-percent increase from December last year. In cities in Southern California, cash home purchases made up 25 percent of all home sales, a jump of two percent.
California-based Stephanie Vitacco, who has been in real estate for 20 years, said she has never witnessed as many cash purchases in her career as she has over the past months.
Southern California real estate firm owner James Joseph said that all bank owned homes for sale and other properties are sold to cash buyers even if the price offers from lender-financed buyers are higher. Cash sales are easier to process and complete, without going through problematic appraisals and contingencies.
These cash purchases are among the major reasons why many owner occupant buyers are not able to find lower-priced homes despite reports of record numbers of foreclosures in the media.
Nevertheless, according to experienced realtors, there are ways to compete with cash-rich investors. One of these is to buy HUD homes. The HUD offers its repossessed properties only to owner occupants for the first 5 days after a property is listed.
Another way is to offer a bigger down payment percentage and a higher offer price. Non-investors can also ask their realtors about properties that are still in the process of being repossessed so they can immediately make an offer that stands out when the properties are finally marketed as bank owned homes for sale.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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