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Cash is king. How often do we hear that mantra for every facet of business?

Well in real estate it certainly rings true, sellers and selling agents no doubt prefer cash offers to those contingent on financing. However, in these most interesting of times for the real industry nationwide, a study shows that cash is no longer leading the South Florida home buying market as it once has. According to this report, industry analysts have observed less investor purchases in South Florida, which has opened up more opportunity for traditional homebuyers preferring the use of mortgage financing.

This same report goes on to say that quote, "46 percent of the home and condominium sales in Broward, Palm Beach and Miami-Dade counties went to cash buyers, down from 49 percent a year ago and from 62 percent in 2014, according to Attom Data Solutions, a research firm based in Irvine, Calif."

Cash deals peaked in the first quarter of 2011 with 7 out of 10 deals accepted not necessitating mortgages. At that time, housing prices hitting bottom, bargain hunters flush with cash descended upon South Florida to pick up short sales and foreclosures for mere pennies on the dollar. However since that time, the market has transitioned into another segment of the cycle – home values have risen and continue to climb, and distressed purchase opportunities are in short supply. These same cash-rich investors being boxed in to competing for a much more limited supply of high-margin flip opportunities are now going elsewhere, or simply exiting the market entirely until opportunities that are more appealing present themselves.

In an environment short on inventory, news that short-term profit hunting investors leaving the market rings in good news for those local buyers seeking to find their next home. Mortgage rates continue to be at all-time lows and lending regulations continue to allow more opportunity for first time homebuyers to pursue the American Dream. For real estate agents, there should be nothing to fear with regards to the level of opportunity - the primary difference now being faced is how to compete and win in multiple offer scenarios where a greater proportion of bids will be contingent on mortgage financing. 

Enter an era for an even greater need of a strong preapproval process. How else can sellers and their agents determine the strongest offer made on their property? The value of the buyer's preapproval lender now carries even more weight than before. This letter, which is meant to represent the strength the buyer has in being able to afford and successfully close on the home, is the primary variable selling agents have to make a determination for accepting one bid over the other. If you are a selling agent, there are a number of considerations that will need to be made, and the buyer and their lender should be more than happy to accommodate the questions you might have regarding how they came to their preapproval decision. Questions such as:

1. Does the homebuyer require gift funds?
2. Can they confirm the homebuyers application has been approved through DU/LP?
3. Have they reviewed the homebuyers most recent two years tax returns and schedules?

As the preapproval process becomes more critical in our real estate partners transactions, we are happy to again offer any of our listeners a copy of our unique "Ask 10 Demand 15" flyer to help you vet the most qualified buyers for your clients home. Or in the case of buying agents, to ensure the qualifications of your buyer before investing the time and resources for submitting bids.

In 2010 I designed the 4 pillars that we spoke about last week. 1 being to engineer the most extensive and thorough preapproval process in the industry, and 2 being the 7/24 rule of offering 7 day loan commitments with 24 day closings for the very purpose of helping you win in multiple offer environments like the one we're in today!

If you would like a copy of our "Ask 10 Demand 15" flyer, please give us a call at 561-864-2458, or email [email protected]. Whether you choose to use our services or not, it's important in this new market environment to have all the resources you can for growing and strengthening your business. It's a competitive market, and it's the little things that will make all the difference.      

            *Outro*

Thank you all for listening. We're always here to support you, so connect get with us on Facebook or LinkedIn @mattweaverspeaks.

We are very excited to announce a major FREE event we are hosting on THIS THURSDAY August 24th at the Cinemark in Boca Raton, FL from 9:30am – 12:00pm. Appraisals have become a real hot button topic in our industry especially recently, so we've invited a senior appraisal expert from Nationwide to do a live Q&A. Andy Lazev has personally overseen over 1 million issued appraisals and is excited to come out and discuss a variety of topics including the appraisal ordering process, comparable sales vs adjustments, effective rebuttal process, garage/porch conversions, and of course a live Q&A to make sure everyone has an opportunity to get their questions answered!

This event is free of charge, and we are currently at 90% capacity, so we encourage you to send your RSVP to confirm your seat and anyone else you might wish to bring with you to [email protected] or call direct to 561-864-2458. Again, this is a FREE event that can greatly enhance the business of buyer agents, list side agents, transaction coordinators, broker owners or anyone involved in the buying or selling of residential real estate. Be sure to reserve your seat today for THIS THURSDAY August 24th from 9:30am – 12:00pm at the Cinemark in Boca Raton, it's going to be one of the more valuable real estate events of the year without question and we're looking forward to having you with us!

The views of this blog, "Your Morning Shot" podcast, and on this site in general are solely those of the authors, Matt Weaver (NMLS-175651) and Zack Lewis, and do not express the views or opinions of Finance of America Mortgage.