The latest from Lili about Boston Real Estate.

More Buyers Pay Cash for Boston Homes

October 22, 2011 |

Due to increasing government regulations, the banks have more guidelines set before them when reviewing mortgage applications. The demands and paperwork  are tedious and endless. This, in turn, makes the process more difficult for buyers and sellers in the marketplace. 

Over a third of homes in Massachusetts were paid for in cash this year. This liquidity trend can be tracked nationwide, not only for homes in Boston. Buyers are choosing to bypass the mortgage process altogether, since banking regulations have tightened and increased frustration.  However, smaller portfolio banks will usually bypass these regulations and are easier to deal with than larger banks.

[caption id="attachment_375" align="aligncenter" width="200" caption="Luxury Residences at Le Jardin"]Luxury Condo Boston[/caption]

Banks feel that lending money is a much riskier business these days and the appraisers working for banks are becoming more and more conservative. Appraisers will often under value luxury homes for sale Boston.  Therefore, more and more buyers don’t even apply for a mortgage if they are in a position to pay cash outright for homes in Boston.  Or, if they decide to go the mortgage route, rather than applying for the conventional 80% financing, they generally apply for a much smaller percentage of the purchase price and increase their down payment. Curious to see how your finances will play out? Use the mortgage calculator to find out.

Who’s paying cash for homes in Boston? The baby boomers and empty nesters. They usually have cash readily available and prefer to invest in real estate when the prices are down. This makes financial sense, because another alternative is putting it into the volatile stock market and risk losing it all. The Wall Street Journal reported this week that the housing market is a better investment than stocks and bonds. Wise choice if you have the capital….

[caption id="attachment_377" align="aligncenter" width="300" caption="Housing Market is Better Investment than Wall St"]Stock Market Affects Boston Homes[/caption]

Historically in the high end market, sellers don’t expect to see a mortgage contingency, and buyers typically pay cash for luxury homes for sale Boston. Some buyers may choose to finance a portion of the sale later down the line, and it’s usually after they close and go on record.

Have you found the mortgage process relatively painless? Or did you opt to pay cash for your property?


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