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Cheap_Coffee t1_j7lwfkd wrote

The last time I was in the housing market I had the same question. I was looking in a fairly affluent bedroom community to Boston which also has an excellent school system -- so prices were high even then.

The answer from my realtor: most of the houses at the top of the market are bought with cash.

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nevercontribute1 t1_j7m1l0d wrote

This is the reality of the situation... it's not "income" that is driving this, it's "wealth". And if you don't come from it, you lose.

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JaKr8 t1_j7nolhs wrote

We split our time between a couple of States throughout the year. In our Connecticut neighborhood the average house is currently about $900k. I know at least 5 of my neighbors had family money, or parents who helped them purchase the house. There is no way the legal secretary 3 houses away could possibly afford a house in this neighborhood on a typical salary for that job. We purchased 15 years ago for about half that amount.

In our Berkshire neighborhood, the houses are probably about $450K. We also purchased that for less than half of that amount about 8 years ago. We are the only people who have bought in that neighborhood in the past 15 years, so most of those people bought for far less than that, and several of the houses there were built on subdivided land from their parents, so there are many multi generation families in the neighborhood as well.

There is a lot of family money floating around, especially in New England.

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Starrion t1_j7pd5k2 wrote

Bet I know where the nicer people are

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SmartSherbet t1_j7ndo2m wrote

Which is why wealth needs to be heavily taxed.

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nevercontribute1 t1_j7nfq40 wrote

Agreed 100%. Wealth tax and inheritance tax should be what we all fight for, but we all get manipulated into fighting over everything else.

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3720-To-One t1_j83xji3 wrote

What we need is for the state to take over zoning from local municipalities.

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what_comes_after_q t1_j7o3q39 wrote

Well, paying cash is a little bit complicated. First, a lot of people pay cash because they are using the sale of another house. Person A buys a house for 500k, then the market took off, he sells it for 800k to buy another house for 800k. That is a cash purchase. Second, banks are doing cash equivalent loans. This means the buyer is pre approved for the loan, no risk of the loan falling through. This is debt, but cash to the buyer. And then finally yeah, you have people who have cash on hand to buy housing.

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paddenice t1_j7osvg9 wrote

Sounds like a contingency purchase, which I’m not sure is the same consideration as a cash offer. Closing on cash is done within 30 days. If you need to muck around with the sale of your home, to buy another “in cash”, you’re not closing in 30 days due to the buyer of your home, in all likelihood.

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Shnikes t1_j7pfed8 wrote

Banks do cash equivalent loans even when rates are higher? Also how often is this scenario happening? Because the new home they are buying for $800k was also likely $500k before the market took off. It’s unlikely they are getting a better house unless they are moving to a new city where the housing market didn’t take off.

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Any_Advantage_2449 t1_j7meb6p wrote

Here is the deal. You can put in an offer saying cash. Have it accepted without having the cash and then by the closing of the sale get a mortgage to pay, it is still technically a cash sale. The people selling expensive houses don’t want a contingency of getting the loan. They won’t accept the offer, if you can get the loan and don’t have the cash you just say cash get offer accepted then go get the loan.

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HeyaShinyObject t1_j7mk6j5 wrote

Some buyers will ask for proof that you have the assets on a cash deal.

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thewags05 t1_j7n37yk wrote

I bought a house with cash after I sold my current house and they asked for proof I have or at least would have the cash

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Rockefor t1_j7niimk wrote

The guy who commented that saw a viral tiktok video that said you could do that. I asked my realtor if we could do that and he told me "absolutely not".

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thewags05 t1_j7nlc6b wrote

Even if you could it would be pretty risky. If for whatever reason you didn't end up getting the mortgage you'd lose your deposit at a very minimum. Worst case you would end up being sued.

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wittgensteins-boat t1_j7nll38 wrote

It is fraud to do so. Representing facts that are not true.

The seller can sue you for damages, and misrepresentation and for halting a sale that you could not fulfil on.

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Valuable_Bread1671 t1_j7nnlo4 wrote

No. If you really wanted to get the house with a mortgage but not stress the sellers out, you could waive your mortgage contingency. Nobody is going to put their house under agreement for a cash sale without proof of funds.

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