In Santa Cruz real estate these days, the high demand for homes and the low availability of homes for sale often lead to bidding wars and overpriced properties.
It’s a classic example of the law of supply and demand. You need to make a strong offer to get the house you want in Santa Cruz.
But if you have cash ready right now, you may find that you can get a better deal by offering to buy in cash rather than having to arrange for mortgage.
Sellers Love All Cash Offers
When you make an all cash offer, you may find that you actually trumped higher offers because they entail getting a mortgage loan. Sellers love all cash offers because, unlike a deal that involves loans, all cash offers are more likely to push through.
It mean a shorter time for closing the deal. Dealing with banks to arrange for a loan takes a lot of time, even if it does go without hitch. The sale can be completed in a week or so, after all the required inspections have been made. For a seller, time means money in their pockets right away and less time for you to change your mind.
The loan may not push through. The buyer’s financial qualifications may change, such as when they suddenly lose their job. The bank may impose a condition that the buyer may not be willing or able to meet. There are many different reasons why this can happen but it can happen.
The appraisal may not be as high as the agreed upon price. That means the buyer may have to cough up a higher amount for down payment, which may lead them to cancel the deal.
Discounts and Other Bonuses
Since an all cash offer is attractive for sellers, then buyers may have the luxury of asking for discounts. Perhaps the price of the house can come down considerably. In Santa Cruz where the prices are rising steadily, even a small discount is a good thing. You can also negotiate for the buyer to pay for home repairs or cover closing costs.
You can have your negotiator do this for you, or you can do this yourself. What you need to keep in mind is that since the seller is enjoying the advantages of a cash offer, you should benefit more from the deal as well.
Additional Advantages for You
In truth, you as he buyer also benefit you make a cash offer. The most obvious one is that by not getting a loan, you won’t have to pay interest. There’s no monthly payment, and no worries about market fluctuations. And there’s no paperwork to bother with.
You also put your money to better use. For example, if your money is just sitting in the bank, then it hardly earns interest. You’ll be able to grow it more when you invest it in a property in Santa Cruz (which appreciates quickly in value).
Buy choosing to buy a home in cash you will also have equity available in case of a financial emergency. And if you want to transfer the title of the house to someone else, there are no restrictions because there is no loan paperwork or limitations to bother with.
And if you’re buying your dream home in Santa Cruz, the fast closing time means that the seller also has less time to change their mind. Just be sure that when you offer cash, you know what you’re doing.