In the market for a new home? You’d better have some serious cash on hand. As fewer people rely on financing to buy their homes, sellers are choosing buyers who offer to pay in cash.
“When you have multiple offers, the cash buyers are typically going to move to the front of the line and have the advantage of buying that home over the buyers who are relying on financing,” explained Daren Blomquist, Vice President of RealtyTrac.
According to new RealtyTrac data, a record 43 percent of home sales this year have been all-cash deals.
“It is surprising to see these buyers who are living in the properties somehow coming together with the cash … to buy these homes,” said Bloomquist. “I think they're getting creative, they realize that cash is king. If they're going to beat out other offers on the property and win the bid, they're going to need to come up with cash.”
For many first-time home buyers, that complicates the process of looking for a new home. Even if buyers aren't stymied by tougher lending standards and higher interest rates, they often don’t have enough liquid assets to purchase a home outright.
Karl and Stephanie Baxter have put in 12 offers around Atlanta in pursuit of their first home, only to be priced out by all-cash buyers. The last home they tried to buy fell through because the sellers said they were looking for a cash-only offer.
"We've almost gotten to the point where we have given up, but we still look around in the hope of finding our first home,” said Karl Baxter, who is a pilot for Express Airlines in Atlanta.
His wife says that they have lowered their expectations as to what kind of home they are looking for, and even lost out on city incentives for first-time home buyers because the offers expired before they could find a seller to accept one of their home bids.
"Now we are just looking for anything, as long as it is a safe neighborhood," she said.
First published May 15 2014, 2:23 PM
Gabe Gutierrez is an NBC News correspondent based in Atlanta, Ga. He joined the network in March 2012, and reports for all platforms of NBC News, including "TODAY," "Nightly News with Brian Williams," MSNBC, NBCLatino.com, and NBCNews.com, as well as Telemundo.
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Gutierrez came to NBC News from KHOU 11 News in Houston, Texas, where he worked as the station's City Hall reporter. Prior to working in Houston, Gabe was a weekend morning anchor and reporter at WJRT-TV, the ABC station in Flint, Mich. While at WJRT, he regularly produced and hosted the station's public affairs program in addition to covering the state legislature and the auto industry. His first on-air job was at WBOY-TV, the NBC affiliate in Clarksburg, West Virginia, where he anchored weekend newscasts and reported during the week. While in college, Gutierrez interned at Telemundo in South Florida and at ABC News' satellite feed in Chicago.
Gutierrez was named "Best Reporter" in 2009 by the Michigan Association of Broadcasters. He also won an Emmy for his investigation into what several banks called one of the largest mortgage schemes ever in the state. The Associated Press also honored him for breaking news coverage and investigative reporting.
Originally from Miami, Gutierrez graduated from Northwestern University's Medill School of Journalism with a double major in political science. He is a member of the National Association of Hispanic Journalists and Investigative Reporters and Editors.