For most prospective buyers getting into the real estate market, one of the key steps in the process is applying for a mortgage. This process can be a bit tedious, with the mortgage broker requiring loads of information before a decision is made. But, in South Florida, it appears that this part of the home buying process is being circumvented with more regularity.
According to a recent report, in the South Florida market paying for a home in an all-cash real estate transaction has actually become more common than getting a mortgage for the purchase. The report indicates that in the first three months of the year in Broward County a whopping 68 percent of homebuyers paid cash as opposed to going through the mortgage process. That number was up 21 percent from the figure in the same period of time last year.
Previous posts here have noted the frequency with which real estate sales in South Florida have been concluded with all-cash deals. But, although these kinds of transactions may sound like a good deal for both the buyer and seller involved, there are some concerns with the practice.
As the recent article noted, all-cash deals are typically reserved for those homebuyers who have upwards of $100,000 at the ready to spend on a home. As our readers can imagine, this will typically exclude younger homebuyers or those who are trying to make their first home purchase. And, some experts have opined that such a large number of all-cash deals is not a good thing for a healthy, full-scale real estate recovery. But, for now, it appears that the frequency of all-cash deals may actually be on the rise instead of on the decline.
Source: Sun Sentinel, “More S. Florida homebuyers making cash purchases,” Paul Owers, May 8, 2014