All Foreclosures are Bought with Cash?

All Foreclosure Buyers are Cash Buyers

Last week, we got a question from a reader who had been pre-approved for an FHA loan and her Realtor told her that she can forget buying bank owned homes because all bank owned home buyers were cash buyers.

Are All Bank Owned San Mateo Homes Bought with Cash?

That is completely untrue. If you take a look at the pie chart I created, which shows how San Mateo County buyers financed the 391 bank owned homes and condos sold in the past 6 months, you can see only 31% of these 391 transactions were purchased with all cash.

Only 31% of Bank Owned Homes Purchased with Cash

Yes, that’s right….and that means 69% (152) of bank owned homes and condos bought within the last 6 months (between 11/19/09 and 4/19/10) were purchased with some sort of financing. Sounds to me like MOST bank owned homes in San Mateo County are bought with a loan, not all cash.

Why is Cash Seen as Better?

In this San Mateo County foreclosure market, we have two groups of people competing to buy the same group of bank owned houses: investors and home buyers. On the more desirable bank owned homes, we are seeing multiple offers and sometimes overbids. In this situation, banks have been known to take all cash offers over offers where financing is involved because they can usually close in less than a week and the bank doesn’t have to wait for the buyer to be approved for financing and an appraisal to be done. Banks want to know they have a done deal with they agree to sell someone the house. Cash takes a lot of the uncertainty out of the equation.

Are Cash Buyers in Every Bank Owned Transaction?

Definitely not. If so, you’d see a LOT higher percentage of all cash transactions. With only 31% of bank owned homes purchased with all cash, it is apparent that not every buyer is a cash buyer.

Need a Loan to Buy a Bank Owned San Mateo Home?

You are not alone and it is possible, as the data shows. With some patience and by utilizing a professional agent who knows the San Mateo bank owned real estate market, you can take advantage of affordable housing prices and historically low interest rates. Call us at (650) 655-2500 or email us at info@LivingWellinSanMateo.com to schedule a no obligation consultation today.

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Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.

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