Cash Offer. Means C A S H...

There has been a large number of cash offers being made over the last few years. I have definitely felt an uptick in my business and other Realtors® have expressed a similar vibe as well. But buyers making cash offers need to be very clear about what a CASH offer is. I ask my buyers that want to offer cash on a house, right up front. Do you have the cash on hand right now? That is, is the cash in the bank and accessible immediately. That my friends is the DEFINITION of cash. It is immediately accessible money. Some buyers are planning on drawing an equity line, or taking a loan on another property, or selling another asset. This is not cash until those transactions are complete.

A buyer making a cash offer that does not have the cash already liquid is in jeopardy of default should the source of the "cash" be delayed or for some reason made unavailable. Even more dangerous is the fact that a cash offer made without liquid cash on hand could be litigated by the seller as civil fraud should the deal fall apart. Cash is C A S H, not "I'm taking a line of credit," or "my uncle is lending me the cash." Buyers need to disclose to the seller the source of the cash if it is not already liquid and sitting in the bank. It is fine and well to make an all cash offer predicated on the arrival of cash from another transaction, be it a sale of another property, or loan, or gift, whatever the case is; but when that cash is on the way rather than in the bank, disclose, disclose, disclose.

Buyers in a tight market are often trying to make their offer stand out in front of other offers, but they must be cautious not to put themselves in legal trouble when making a soft cash offer. Buyers that want to play with the "big fish" in the hard cash arena, need to take the loan, sell the asset, or grab the gift, etc. BEFORE making the offer.    

Clark County Sales still Robust

Despite the general feeling of a market slow down, Clark County still pushed out nearly 700 sales last month (699). The median price including mannys and condos was 356k, but 3/4 of the units were between 250k and 400k the 'meaty' median range. There is little inventory in the sub 250k range and plenty of inventory above 500k so the market remains solid and close to neutral, if you are trading in the middle.

Buyers in the entry level will continue to struggle as rising rates and virtually no inventory make that sub 250k market a rough ride. That is not to say buyers should flee the market, in fact they simply need to be patient and willing to settle for a quality property even if it isn't exactly what they want. So long as jobs remain plentiful and wages continue to rise, demand remains for homes and prices will rise over time. Getting in now lets that entry level buyer enjoy some market appreciation so that later on they can make the move up with equity in the starter home.

Buyers at the other end can kick some tires and beat down sellers as inventory levels are actually pretty high. That doesn't mean that every upper end home is overpriced. In fact a well priced home in the 750k plus range will still find a buyer in a reasonably short time. It is the large homes that are dated, odd style, or otherwise non-traditional that are filling up the inventory and remain ripe for a discount.

Sellers in the upper price range should have no delusions about the value of their home. Price per square foot is nearly useless in the upper end. Upgrades, materials, build quality, neighborhood, design, age, and numerous other factors can dramatically effect high end homes causing widespread variance in price per foot.

This market remains healthy with modest appreciation, tight but manageable inventory levels in all but the very bottom, and interest rates that are still relatively low despite constant creep up all year long.

It's all good friends.

Road Trip

I am wrapping up my week long road trip with my youngest son who is out of the Army and we are headed home! Here is a post from the past that still has relevance:

Local Realtors are Invaluable Assets

October 28th, 2016

I am meeting with new clients this weekend about selling their lovely home. The odd thing is that they just bought this home a few months ago. I do not have all the details as of yet, but I do know that my new clients bought the house site unseen and moved here from 900 miles away. They utilized one of our national consumer real estate websites to buy the home and the listing agent's office was in Seattle 160 miles away from here.

I won't opine any further on this specific case, but in general my belief is that national websites such as Zillow, Redfin, Trulia, etc. are excellent tools for people searching for homes especially when looking at far away destinations. That is where their practical benefit ends however. There is no substitute for a local pro that understands the nuances of neighborhoods and the other important issues that face homeowners in a new region. 

Once a buyer thinks they have narrowed it down to a few homes they want to see, or even offer on, a local pro should be contacted other than the listing agent. It is important not only to have a local agent that understands the local market, but also an agent unaffiliated with the seller. A listing agents greatest obligation is to the seller for which he has a signed contract with statutory language. The listing agent will pay the buyer's agent commission so the buyer is in much better shape using their own agent.

It is important to take the time to ensure you are buying the best house for you at the best price possible and with favorable terms. Buying a home and then having to sell it three months later is rarely a profitable exercise. Buyers need to be sure they have all the proper information before buying a house.

If you find a home on one of the national websites, there are usually buyer's agents listed. Sometimes there will be a preferred or premier, et al. agent. These agents have likely paid the company money for placement. There may also be a few random agents listed that have a profile on the system and list that area as their area of expertise. Be sure to visit the agent's profile before contacting them.

There is no better asset to a home buyer than a local professional looking out for the buyer's best interests, not the seller's.