If you are buyer planning to purchase Miami Beach Real estate, one of the first things that an experienced Realtor will (should) ask you is, “How are you planning to pay for the property, with cash or financing?” Honestly it’s a question that some buyers get offended by when asked right off the bat but the truth is our market is very, very competitive and if you are a serious buyer, you need to have all of the financial details organized in advance to looking at property. There is nothing worse than missing out on a good deal because you are not prepared. Or even worse, if you need financing, looking at properties in buildings where you cannot get financing. Not to mention that you will need some type of documentation explaining how you will pay (pre-approval letter or proof of funds) when you make an offer.
Is cash still king if a large percentage of buyers are paying cash?
Yes, I think it’s still king because it’s really the preferred method of buying Miami Beach real estate. On the other hand, it doesn’t make you a “woo hoo, it’s a cash offer” kind of buyer.
In fact, according to the numbers from our local association that are in from January 2013, 50.1% of single family homes and 75.5% of condominiums were closed with cash.
1. Sellers like cash offers because there is a lot less red tape to manage.
2. Financing can take up to 45 business days to close, while cash can close as soon as the title work is completed, right now it’s at about 3 weeks or so.
3. Some units may be in buildings where traditional financing is not eligible. The reasons why the building may not be eligible may not necessarily be bad unfavorable. Banks have very strict criteria. For instance if the building is brand new it may not be eligible, there can be many reasons.
4. Some properties (like foreclosures or short sales) may have situations where the seller cannot accept financing and only cash.
For example here is a story about one of our recent buyers who purchased a condo in Miami Beach.
We had a client who was interested in purchasing a Miami Beach condo. He sent me all of our paperwork and his proof of funds before he arrived to Miami Beach. While he was here (2 days) we found a great deal and it came on the market while he was in town. While we were at the property previewing it, three other buyers also came in to see the unit. Needless to say, this is not uncommon as our market is very competitive, it was a great property and priced to sell. We knew it would go quickly. So we ran back to the office, wrote up an all cash offer, attached his proof of funds and offered to close within three weeks.
The offer was accepted and he just closed a few weeks ago.
So in answer to my original question. Cash is definitely still king because it’s the preferred method of payment in the local Miami Beach real estate market, however it’s not something that will make you a “woo hoo, it’s a cash offer” kind of buyer because a large percentage of buyers are paying with cash. What will set you apart is being prepared and ready to jump on a good deal when you see it. This means being prepared before you start looking a properties in person.
Are you just getting into the Miami Beach Real Estate Market? If so, what are your impressions where the market is headed? Please leave a comment and know we never share, rent or sell your contact info with any third party. We promise!
Copyright © By Jamey Prezzi 2013 * All Rights Reserved* Is Cash Really King if Everyone is Paying Cash for Miami Beach Real Estate?