IF YOU’RE LOOKING TO BUY A HOME, IT IS NO SECRET THAT CASH IS KING. AND AS REPORTER RACHEL PERRY TELLS US, MORE PEOPLE ARE PAYING CASH IN ONE AREA OF THE TREASURE COAST THAN ANYWHERE ELSE IN THE COUNTRY. NATIONWIDE, WE’RE TOLD ABOUT 28% OF PEOPLE PAY CASH FOR THEIR HOME. BUT IN SOME AREAS, LIKE HERE IN SOUTH FLORIDA, THAT NUMBER IS MUCH HIGHER. NOW, IN SOME AREAS, MORE THAN HALF OF RECENT BUYERS HAVE SKIPPED FINANCING ENTIRELY. SEBASTIAN AND VERO BEACH WERE AT THE TOP OF THE LIST, WITH 63% OF BUYERS PAYING IN CASH. THAT’S ACCORDING TO THE NATIONAL ASSOCIATION OF REALTORS. NAPLES, PUNTA GORDA AND A PART OF LOUISIANA ALSO MADE THE LIST, SEEING MORE THAN 50% OF SALES MADE WITHOUT A MORTGAGE. WE TALKED WITH JEREMY BLUM OF BLUM REALTY GROUP, WHO EXPLAINED WHY PEOPLE MIGHT BE OPTING TO PAY IN CASH. CASH IS KING. CASH IS VERY ATTRACTIVE TO MOST HOMEOWNERS RIGHT NOW, AND ALSO THEY WANT TO AVOID A LOT OF THE FEES THAT ARE ASSOCIATED ON GETTING A LOAN. A LOT OF PEOPLE ARE DOING A HOME EQUITY LINES OF CREDIT BECAUSE THEY HAVE SO MUCH EQUITY INSIDE OF THEIR HOUSE THAT TO GO OUT AND GET A MORTGAGE MIGHT BE MORE EXPENSIVE THAN JUST DOING A HELOC AND BUYING THE HOUSE OR THE PROPERTY OUTRIGHT CASH. BLUM SAYS CASH PURCHASES ARE ALSO APPEALING TO SELLERS, AS THERE’S NO BANK INVOLVED, NO APPRAISAL AND INSPECTIONS MIGHT EVEN BE WAIVED, MAKING IT AN EASIER PROCESS FOR EVERYONE. WHETHER IT’S A HUGE MORTGAGE COMPANY OR A SMALL MORTGAGE COMPANY DEALING WITH PEOPLE WHO MIGHT OVERLOOK SOMETHING OR MISS SOMETHING, OR THEY DON’T ENTIRELY SCREEN THEIR THEIR BUYER, WELL, THEN THE THE SELLER WHO ACCEPTED THAT OFFER, THAT WAS A A BANK OR HAD FINANCING. WELL, NOW THE DEAL FELL APART VERSUS IF THEY HAD A CASH BUYER, THEY NEVER WOULD HAVE HAD THOSE ISSUES TO BEGIN WITH. YOU CAN READ MORE ABOUT WHY IN SOME AREAS, MORE THAN HALF OF RECENT BUYERS HAVE SKIPPED FINANCING ENTIRELY. ON O
Why more people are buying homes in cash
WPBF 25 News sat down with a local realtor who explained some of the benefits of paying in cash.
According to the National Association of Realtors, buyers are paying cash for homes mostly in the Sun Belt Markets. Your neighborhood: Local coverage from WPBF 25 NewsThe NAR reports that about 28% of homebuyers nationwide paid cash for their home. The areas of Sebastian and Vero Beach are at the top of the list where the NAR notes 63% of buyers paid cash. In areas like Punta Gorda, Florida, Naples, Florida, Houma-Thibodaux, Louisiana, Punta Gorda, Florida, and Naples, Florida, the NAR reports more than 50% of transactions were made without a mortgage.Get the latest news updates with the WPBF 25 News app. You can download it here.Local Realtor Weighs InWPBF 25 News sat down with Jeremy Blum of Blum Realty Group to better understand why that could be. The following is a transcript of the interview with Blum. Question: What are some of the reasons why somebody might opt to pay for a home in cash?Blum’s answer: Cash is king. Cash is very attractive to most homeowners right now, and they also want to avoid a lot of the fees that are associated with getting a loan. I also know that, like you said, a lot of people are doing home equity lines of credit because they have so much equity inside of their house that to go out and get a mortgage might be more expensive, rather than just doing a HELOC and buying the house or the property outright in cash.Question: What are some of the downfalls of getting a mortgage rather than just being able to pay it up front?Blum’s answer: I’m a strong person in using the banks and keeping my cash. I like to leverage, but to each their own. Some people don’t want to do that, or you’ll notice too that a lot of the people that are purchasing the homes in cash, if you look at those properties and track them and look at them 90 days later, I guarantee you they end up taking a mortgage out after they closed. Question: Why is that? Blum’s answer: Because they’ve already secured the home. It’s an easier process when you’re a homeowner versus trying to buy a property. I’ve never been a lender, but I heard it’s a very strict process, and they want everything and anything from tax receipts, good credit, income, versus somebody who can eliminate all that red tape, can pull out money or get money from a friend, a blood relative, or if they have the equity in their home, they’re better off doing that.Question: Why is it that maybe we would see this higher percentage of people doing this in an area like South Florida? Blum’s answer: That’s a great question. I’m finding that the people who are buying my listings that are out of state, I keep hearing the same story that they have lived in there, whether it’s a house or a condo in either California or New York, and they’re selling those for millions and millions of dollars. Then, when they’re coming here and seeing these favorable prices, they’re actually asking me, Jeremy, like, can you find me three or four of these properties because they have made so much money on selling their property or that million-dollar condo that they want to put their money to work.Question: Why might a buyer paying in cash be appealing to a seller? Blum’s answer: It’s appealing to a homeowner selling a house for many reasons. When a person’s buying with cash, there’s no bank involved. There’s no appraisal involved. It’s really, some of them even waive inspections, you know, so it’s kind of like an easier process versus having to go through the whole appraisal. Whether that appraisal is going to come in at contract price or lower, and then having different people in that own, whether it’s a huge mortgage company or a small mortgage company dealing with people who might overlook something or miss something, or they don’t entirely screen their buyer. Well, then, the seller who accepted that offer that was a bank or had financing, well, now the deal fell apart, versus if they had a cash buyer, they never would have had those issues to begin with. Question: For young people entering the housing market, what would you say is the key piece of information they should know right now?Blum’s answer: I’m a big advocate of this: that if you’re trying to get into or buy your first property anywhere in South Florida, I highly, strongly encourage you to go after the house that’s in the worst condition in the best neighborhood. There are programs that lenders or banks offer where you can buy a house and even have the renovations paid for by the bank. So, you’re getting this house at a discount price, and then you can have the bank pay for the renovations, and now you have a new home, versus trying to go after those homes that have all the bells and whistles. Well, those are going to have a premium attached to them. All the buyers who’ve been waiting are going to want to go to that house, which is going to create a bidding war. So you’re going to get bid out or miss on that property because everyone’s looking for that move-in, ready-to-go property. The NAR reports that, while mortgage rates remain above six percent, cash buyers are finding ways to stay active, including staying competitive in markets with a tight housing supply or avoiding borrowing costs.
According to the National Association of Realtors, buyers are paying cash for homes mostly in the Sun Belt Markets.
Your neighborhood: Local coverage from WPBF 25 News
The NAR reports that about 28% of homebuyers nationwide paid cash for their home. The areas of Sebastian and Vero Beach are at the top of the list where the NAR notes 63% of buyers paid cash.
In areas like Punta Gorda, Florida, Naples, Florida, Houma-Thibodaux, Louisiana, Punta Gorda, Florida, and Naples, Florida, the NAR reports more than 50% of transactions were made without a mortgage.
Get the latest news updates with the WPBF 25 News app. You can download it here.
Local Realtor Weighs In
WPBF 25 News sat down with Jeremy Blum of Blum Realty Group to better understand why that could be.
The following is a transcript of the interview with Blum.
Question: What are some of the reasons why somebody might opt to pay for a home in cash?
Blum’s answer: Cash is king. Cash is very attractive to most homeowners right now, and they also want to avoid a lot of the fees that are associated with getting a loan. I also know that, like you said, a lot of people are doing home equity lines of credit because they have so much equity inside of their house that to go out and get a mortgage might be more expensive, rather than just doing a HELOC and buying the house or the property outright in cash.
Question: What are some of the downfalls of getting a mortgage rather than just being able to pay it up front?
Blum’s answer: I’m a strong person in using the banks and keeping my cash. I like to leverage, but to each their own. Some people don’t want to do that, or you’ll notice too that a lot of the people that are purchasing the homes in cash, if you look at those properties and track them and look at them 90 days later, I guarantee you they end up taking a mortgage out after they closed.
Question: Why is that?
Blum’s answer: Because they’ve already secured the home. It’s an easier process when you’re a homeowner versus trying to buy a property. I’ve never been a lender, but I heard it’s a very strict process, and they want everything and anything from tax receipts, good credit, income, versus somebody who can eliminate all that red tape, can pull out money or get money from a friend, a blood relative, or if they have the equity in their home, they’re better off doing that.
Question: Why is it that maybe we would see this higher percentage of people doing this in an area like South Florida?
Blum’s answer: That’s a great question. I’m finding that the people who are buying my listings that are out of state, I keep hearing the same story that they have lived in there, whether it’s a house or a condo in either California or New York, and they’re selling those for millions and millions of dollars. Then, when they’re coming here and seeing these favorable prices, they’re actually asking me, Jeremy, like, can you find me three or four of these properties because they have made so much money on selling their property or that million-dollar condo that they want to put their money to work.
Question: Why might a buyer paying in cash be appealing to a seller?
Blum’s answer: It’s appealing to a homeowner selling a house for many reasons. When a person’s buying with cash, there’s no bank involved. There’s no appraisal involved. It’s really, some of them even waive inspections, you know, so it’s kind of like an easier process versus having to go through the whole appraisal. Whether that appraisal is going to come in at contract price or lower, and then having different people in that own, whether it’s a huge mortgage company or a small mortgage company dealing with people who might overlook something or miss something, or they don’t entirely screen their buyer. Well, then, the seller who accepted that offer that was a bank or had financing, well, now the deal fell apart, versus if they had a cash buyer, they never would have had those issues to begin with.
Question: For young people entering the housing market, what would you say is the key piece of information they should know right now?
Blum’s answer: I’m a big advocate of this: that if you’re trying to get into or buy your first property anywhere in South Florida, I highly, strongly encourage you to go after the house that’s in the worst condition in the best neighborhood. There are programs that lenders or banks offer where you can buy a house and even have the renovations paid for by the bank. So, you’re getting this house at a discount price, and then you can have the bank pay for the renovations, and now you have a new home, versus trying to go after those homes that have all the bells and whistles. Well, those [homes] are going to have a premium attached to them. All the buyers who’ve been waiting are going to want to go to that house, which is going to create a bidding war. So you’re going to get bid out or miss on that property because everyone’s looking for that move-in, ready-to-go property.
The NAR reports that, while mortgage rates remain above six percent, cash buyers are finding ways to stay active, including staying competitive in markets with a tight housing supply or avoiding borrowing costs.
