Yeap, that’s it.
The impression with most buyers is that because they are paying cash, they should get a big discount off of the asking price. That is just not the case.
(Click here to see embedded video)
Cash buyers in Big Bear are only saving 1% for paying cash as compared to those buyers that are getting a loan or any other type of financing.
I am no accountant, but it seems to me all the tax benefits of having a loan against the property add up to more than a 1% savings.
Year to date, there have been 164 cash sales for residential properties in Big Bear. The average sales price to list price ratio is 94%. Compare that to the 95% ratio for all other types of financing.
Here are some other interesting stats for cash vs. loan/other financing sales –
- Cash sales YTD are up 123% compared to 2008 numbers, 164 v. 74. This is expected, as overall sales are up 34% YTD, but there has been a marked increase in cash sales.
- The average sales price for cash sales this year – $303, 418 vs. $258,605 for loan/other financing sales. I would have thought this would be the opposite.
- Average days on market comparison – cash sales 101 DOM vs. loan/other sales 130 DOM. This goes to my point that the hot properties, those selling quicker, are attracting more cash buyers and competition amongst themselves.
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Tyler, Given the possibility of inflation and the current level of cheap money, better to get some leverage.