All-Cash, No Contingency Home Buyers. Where's It All Coming From?

If you are out looking for a home, and had have make a couple offers that were not accepted, chances are, you have heard that someone else with all-cash, and maybe even, no contingencies, got their offer accepted. These types of offers are spreading like wild fire. But...where is all this cash coming from? Who are all these people who have this type of money available? And no contingencies? That sounds crazy, right? To be honest, I have had a number of buyer ask me if all these people with all this cash are foreign investors. Everyone has their own idea, or conspiracy theory, of what is going on. Well...who better to ask than a real estate agent? So here we go:

Yes, there are foreign buyers out there right now, but...when has that not been the case? This is LA and we have always had a large variety of foreign money here. And no...I'm pretty sure there isn't someone sitting somewhere like China on the phone saying "buy now".  So, yes, there are a lot of foreign buyers in the market right now, but that isn't everyone with all-cash.

What about the real estate investors or "flippers"? Is it them doing these deals with all-cash? Yes, there are a number of investors and flippers out there buying houses with all-cash. But fact is, I've been on the buying side of a lot of deals, and I've seen houses being sold to all-cash buyers that weren't worth flipping because they were in good shape and there wouldn't have been enough room for someone to buy the house, put $ into it, then resell for a profit. And the people buying it, weren't going to rent it out, so, it's not totally all the investors either. Although, some investors are buying houses to rent out and sell in a few years hoping to turn a profit that way.

So...let me turn this article back on to you, the reader. Chances are, if you are reading this, that you are out looking for a home to buy. Well, where did you get the money for your down payment? Have you been saving it for when you felt comfortable buying? Or maybe it was left to you in an inheritance? Perhaps a family member who may have thought of leaving you some money after their passing decided to go ahead and gift it to you now while it was a good time to buy?  Well, these are the other people with all-cash. Some people are very meticulous about saving money and now that time has come where they feel comfortable about the economy and where it is headed, they are ready to spend it, on what they hope will be a good investment in their future. And there are a lot of people that inherited money years ago, or even just recently, but now this is the time to put it towards a home before prices soar again.

 So, there you have it. That is a mix of where the all-cash buyers are coming from. And it's no conspiracy. I mean, why are you looking to buy right now? Well, whatever your answer is, there are a lot of other people thinking the exact same thing. It's no secret. Prices are going up, rates are incredibly low, and people are feeling good about the economy.

And last but not least, the "no contingency" buyers. I honestly don't know what to make of this one. It is a risky move but if this is what you think will get you the house, and there is a good chance it might, than maybe it is something you are up for. Or maybe not. It really is a person to person decision you and your real estate agent should talk about. As always, if you are looking to buy or sell, feel free to call me. I will be available to answer any questions you may have about the real estate market any time as well.