All cash sale

[J Grant]

In my opinion, cash is always king. MV is based upon cash (not credit) therefore when a sale sells more with financing, it suggests that the financing is above market, not that the cash is "below" market value. It is never below market value.

WRONG - MV is NOT based upon cash - or please paste here the MV definition which says that.

The MV definition commonly used states says cash or financing terms comparable thereto.

Whether or not an individual sale price was affected by either using cash or the terms of financing ,is up to appraiser to determine.

 

[Meandering]

WRONG - MV is NOT based upon cash - or please paste here the MV definition which says that.

The MV definition commonly used states says cash or financing terms comparable thereto.

Whether or not an individual sale price was affected by either using cash or the terms of financing ,is up to appraiser to determine.

OMG!




URAR Page 4

 

[David S. Roberson]

WRONG.

The market is the sum of the transactions, and in some markets there are many cash sales, in some very few, in some the use of cash and financing is about equal.

Cash can sometimes be predominant in the extreme ends of the market -investor , homes needing repair are typically sold cash, as are very expensive high end homes. The middle class and working class segments of market one usually sees financing predominant, though cash is also seen. BTW " cash" in a contract usually means no financing contingency - but the buyer can choose to get a mortgage anyway - the agents write "cash" on the MLS comments, because the contract just had no financing contingency - however a buyer can still apply for and get a mortgage - the contract no financing contingency means if the financing is declined, they are obligated to buy it with cash funds.

A LOT of sales on MLS indicate cash when a little research shows it was financing. Some realtors are just too lazy to indicate financing.

 

[CGinMN]

A LOT of sales on MLS indicate cash when a little research shows it was financing. Some realtors are just too lazy to indicate financing.

A lot of people make “cash” offers but then end up financing it.

 

[Meandering]

A lot of people make “cash” offers but then end up financing it.

Because the financing is creative and favorable via artificially reduced interest rates from the Fed.

 

[glenn walker]

U

What's your consensus on all cash sale? Are they sold above or below market.
Before I found them to be under market. Now with bidding on limited number of homes for sale, cash sale are near market.

Up until Covid-19 in over 35 years of sales and appraisals we almost never saw a cash sale at market and most where investors buying 10% to 20% below market. Today in my area all cash sales are common and mostly at or higher than list price. never seen anything like it in my lifetime. Also never knew there was that much cash flowing around hear.

 

[Terrel L. Shields]

WRONG - MV is NOT based upon cash

Can you not read? It very clearly said CASH...and when CASH and lent money are NOT ONE AND THE SAME, then the loan is not equivalent to CASH. CEV-cash equivalent value. When I took those first early classes, that was a huge issue. It is apparently invisible now. The truth is when cash is king and people have their own SKIN IN THE GAME, they tend to be focused on the actual COST rather than on the PAYMENT...

we almost never saw a cash sale at market and most where investors buying 10% to 20% below market.

Or was it because they needed A- a fast sale or B-the property would not qualify for low interest long term financing and the choice was to borrow commercially priced monies hence discount the property accordingly or accept cash? Here most cash sales are either distressed properties, properties that won't qualify for FHA/FNMA financing, or people who sold at a profit and now are flush with cash.

 

[J Grant]

Can you not read? It very clearly said CASH...and when CASH and lent money are NOT ONE AND THE SAME, then the loan is not equivalent to CASH. CEV-cash equivalent value. When I took those first early classes, that was a huge issue. It is apparently invisible now. The truth is when cash is king and people have their own SKIN IN THE GAME, they tend to be focused on the actual COST rather than on the PAYMENT...

Or was it because they needed A- a fast sale or B-the property would not qualify for low interest long term financing and the choice was to borrow commercially priced monies hence discount the property accordingly or accept cash? Here most cash sales are either distressed properties, properties that won't qualify for FHA/FNMA financing, or people who sold at a profit and now are flush with cash.

Market value is not about the loan, market value is about the PRICE -
MV as defined -what the most probable PRICE a property should bring ...with cash or financing at terms comparable thereto is the means of payment for a sale to happen.

Whether using cash or financing -the set of terms of what you call "lent money" affected a price up or down from similar property prices is part of our analysis.

 

[Sadie]

According to the definition of Market Value that you regularly use in your appraisals.... cash IS the market. It's the use of Seller financing or the payment of closing costs, etc... that might have an impact.

Read the definition-Cash or its equivalent.

 

[J Grant]

DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale.