Cash buyers in the high-end Sarasota real estate market are very prominent. All-cash deals allow for quick closings with few contingencies and low risk to sellers. As such, they typically have more leverage and appeal to sellers than traditional financing deals. This makes it more difficult for traditional buyers to compete with cash offers, especially in a tight inventory environment.
Cash deals are trending higher now for a couple of reasons. Lending standards are still very restrictive, and buyer competition is intense, particularly in markets with lots of demand and not much supply like Sarasota. The thinking is: If I pay with cash, I’ll get to the front of the line and have a leg up on the competition.
International buyers are typically bringing all cash or a high percentage of cash to the deal. For sellers, the benefits of an international buyer are obvious: cash deal, fast closing, limited viewings, few contingencies, etc. That's why using an
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agent with a network of international clients and a proven track record of prior international experience is key.
This trend is nationwide, and while the share of cash sales is higher than “normal” in Sarasota, it’s most prevalent in Florida and Midwest markets. In the first quarter of this year, Miami had the largest share of cash buyers in the country at nearly 65 percent of total sales, down from 71 percent in 2012. Tampa and Cleveland were close behind with 57.1 percent and 54.2 percent, respectively.
They aren’t all institutional investors, necessarily. After all, they found their deals last year and have more or less exited the party as home prices have risen. Rather, they are baby boomers, empty-nesters, wealthy families buying second homes/vacation properties and foreign buyers who are coming to the U.S. from all over the world and snatching up properties in places such as Miami, Tampa, and Sarasota.
Traditional buyers are faced with greater hurdles when making offers because they are likely to have to compete with cash offers, especially in the tight inventory environment in the bottom tier of the market.
How can non-cash buyers possibly compete with all-cash buyers? Your best defense is to be a well-qualified buyer. You’re gainfully employed, able to make a substantial down payment (20+ percent), have been pre-approved, and, of course, have good credit. You should also make a strong offer and ideally one without any contingencies. Finally, sweeten the offer any way you can. Find out what’s motivating the sellers and give them what they want. Remember, at the end of the day, money is money, and many sellers may not be in a great rush to close; they are simply looking for clean offers that are going to go through, hassle-free. Buy a house in Sarasota Florida.