As it has become increasingly difficult to get a South Florida mortgage in recent years, more South Florida home buyers are using cash to purchase homes, according to recent real estate market data.
According to the National Association of Realtors, about 28 percent of 2010 home sales involved all-cash transactions. This trend appears to be an increasing, especially when one considers that in 2008, 14 percent of all real estate transactions were cash only.
In the Miami-Fort Lauderdale area, the prevalence of all-cash transactions is even more apparent. In 2010, more than half of all transactions in the area involved cash buyers.
South Florida Home Buyers Find Getting a Mortgage Difficult
Some experts have suggested that the sluggish housing market has caused the increase in cash-only real estate transactions. Here’s why.
After the housing market bubble burst, many lenders tightened their belts and made it more difficult to get a mortgage. According to a national survey by MortgageMatch.com:
- 70.6 percent of Americans feel like the difficulty of getting a mortgage is a serious problem.
- 32.3 percent of Americans found that understanding the mortgage process and meeting lender requirements is more difficult than getting the mortgage itself.
- 79 percent of recent home buyers said that getting a mortgage was as difficult or more difficult than they expected.
- 20.9 percent of home buyers said that it stressed them out more to wait for approval on a mortgage than to wait to hear back on a job opportunity.
- 10.8 percent of borrowers said their lender charged them a higher interest rate than they were originally quoted or expected.
- 20.7 percent of borrowers said that finding a lender that was easy to work with was a challenge.
All Cash South Florida Real Estate Deals Seen as a More Attractive Option
The recent data released on home buyers’ perceptions of getting a mortgage suggests that the process is stressful, frustrating and upsetting.
Meanwhile, those home buyers who are opting to use cash on their real estate purchase are finding that the process is easy and even advantageous.
Home buyers who use cash only usually get 5 to 10 percent off the asking price of a home as compared to those buyers who use a mortgage.
Many South Florida real estate experts agree that sellers prefer cash real estate transactions because they tend to be quicker. In addition, the seller doesn’t have to worry about a bank rescinding a mortgage deal.
Homes for Sale Available Now
Are you interested in checking out some of the properties available now in Aventura, Florida and other nearby communities such as Golden Beach and Hallandale? Then contact me, Scott Patterson, your South Florida real estate expert.
As your South Florida REALTOR, I’ll keep you up to date on more trends like this one in the Aventura real estate market as well as let you know of any Aventura homes that enter the Aventura real estate market.