All-Cash Buyers Save Big

Those who pay all cash for a home rather than taking out a mortgage pay less

All-Cash Buyers Save Big
April 29, 2016

In their Q1 2016 U.S. Cash & Institutional Investor Housing Market Report, RealtyTrac is reporting that buyers who buy a home outright by paying in cash actually pay 23 percent less than other homebuyers. This applies only to those buying condos or single-family homes; buyers who purchase larger properties may still save if buying in cash, but the savings are not as high.

Nationwide, RealtyTrac’s data show that all-cash buyers paid an average of $91 per square foot during the first three months of the year as opposed to the $118 average per square foot cost that other buyers paid. All-cash buyers make up a rather small percentage of the total number of homebuyers, said RealtyTrac Senior Vice President Daren Blomquist. He claimed that the number of all-cash buyers is shrinking, but that they do often beat out buyers who are taking out a mortgage. At times, all-cash buyers may be chosen over financed buyers even when they submit a lower bid on a property.

All-cash buyers also have the option of purchasing homes that are in poor condition and do not qualify for financing. These properties are almost always priced cheaper than homes that are in better condition, a factor that also plays a part in lowering the national average of all-cash home purchases.

The report also noted that there are some markets where all-cash buyers actually paid more per square foot than buyers with financing, but this tends to be fairly rare.

Moneytips can help you refinance your existing home loan.

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