Love's Real Stories

Cash is a real estate game changer, and the real estate game in the North Valley has changed. Cash buyers are rolling into town like sailors on leave, buying up everything in sight. Sellers are opening their front doors, rolling out the red carpet, waving cash buyers in like long lost friends. Buyers with loans stand outside in the cold watching cash buyers get the V.I.P treatment.

Seller: “I had four offers on my house the first weekend on the market. One was full-price involving a loan; one was $5,000 less, all cash. My realtor countered the all cash buyer; they came up $2,500 and we called it good.”

Accepting less money for all cash?

“Yes. We didn’t want to chance the sticky parts of getting loans. We’ve heard about problems with buyers qualifying for loans, and problems with appraisals,” he said. “Also, the cash buyer could close faster than the loan buyer. That worked for us.”

Seller two: “We had two offers on the table, both with loan financing. We were just about to sign one, when we got the word another offer was coming in. It turned out to be all cash and over our asking price. We signed it quick and closed fast.”

Low supply is another game changer in real estate, and the real estate game in the North Valley has changed that way, too. Low supply puts the buyers in a foot-race every time a new listing hits the market. The buyer-with-loan might win the race to the house, but the cash buyer might win the day, if the seller waits for the offer.

Cash Buyer: “The time is now. Real Estate is my group’s favorite investment, but we’ve held off for the last several years, except for a couple of properties we fixed and flipped. Now we’re buying fixers and rentals. Interest rates are staying low, and we think the real estate market has flattened out, so our money will see a better return in real estate than in a money market account. We’ll buy five or six properties this year in and around the North Valley.”

This is all good news for sellers, not so much for the buyer-with-loan.

Buyer-with-loan: “It’s hard right now. My husband and I thought we could get a great deal on a house. We found out the hard way we’re not the only buyers out there. We wasted a lot of time shooting low-ball offers around, and we walked away from deals we wish we had back now. We started four months ago and it’s gotten a lot tighter. The last few houses we offered on had multiple buyers and the cash guys blew us out of the water on a couple. We’re not discouraged, though. We’re qualified and our loan is solid. We know the market, and our realtor is on the ball, so we’ll get our house. We won’t hesitate now when we see a house we like.”

Real estate math looks like this: cash buyers plus low supply plus high demand equals higher prices.

The real estate game in the North Valley has changed.