Categorized | Residential

Cash Real Estate Transactions Becoming More Common

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As lending restrictions become more stringent, and housing prices drop lower and lower, cash transactions within the real estate market are becoming more commonplace. In fact, more than thirty-four percent of all residential real estate transactions that have taken place this year in the state of Massachusetts have been paid for in cash.

The number of buyers paying in cash has increased by almost fifteen percent in the last year alone. Even with the record-low interest rates that are currently being pushed by the Federal Reserve, many buyers are opting not to take out a mortgage to purchase their home.

Lending standards have become overly restrictive, and rather than avoid the frustrations that may come with waiting on an application to be approved, buyers are simply offering cash for homes. Cash transactions are generally easier to process, and as such, are preferred by those selling their house. As such, buyers offering cash are more likely to beat out other prospective buyers, even if their cash bid is lower than one backed by a mortgage loan.

Those that are buying homes with cash come from all walks of life. Some are those looking to downsize, and are using liquid cash that they received from the sale of their previous, bigger home. Others are very wealthy, and have a significant amount of liquid cash available. Lastly, other cash buyers are investors that are choosing to put their money in places other than the volatile stock market at this time.

Even some of the most expensive residential units are being paid for in cash. In just the last few months, three properties sold for over three million dollars each were paid for in cash.

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About James Pattric

James writes for the Residential category (along with Josh Johnson) and also heads up the Resources category.

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