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Cash Locks in Maui Real Estate Deals
More and more buyers across the United States are paying cash for real estate. In fact, the National Association of Realtors has stated that all-cash home sale transactions have risen from 14 percent in 2008 to 28 percent in 2010. Many of the housing markets that have suffered the most as a result of the economic downturn are now experiencing the highest rates of cash transactions. For example, cash transactions accounted for more than 50 percent of home sales in the Miami-Fort Lauderdale area in 2010 and approximately 42 percent of 2010 home sales in Phoenix were for cash. With regards to Hawaii, 12 percent of single family home sales were cash transactions while 33 percent of condominium sales were cash transactions.
For Maui in particular, there have been 125 homes sales so far since the beginning of the year. 38 of those sales, or approximately 27 percent, were for cash. The percentage was significantly higher for condominium sales with 123 of 199 sales, or approximately 62 percent, being cash transactions. As for vacant land sales on Maui, 14 out of 18 were cash transactions. In other words, 51 percent of all Maui property sales that have occurred so far in 2011 were for cash.
While these numbers could be the result of economic recovery or stricter lending requirements, the fact remains that there are several advantages to paying cash for real estate. For instance, cash sales involve less paperwork and therefore take less time to close. Cash real estate sales also do not require any reliance on the bank, so there are no worries about financing falling through at the last minute. Another great benefit is the fact that cash buyers enjoy greater bargaining power and can often negotiate five to 10 percent reductions in asking prices.
Having the ability to pay cash for real estate also gives buyers a competitive edge when a property has multiple offers or the potential for multiple offers. Recent evidence of this can be found in the sale of the 10 most expensive single-family homes on Maui, seven of which were paid for in cash. Consequently, if a buyer has their heart set on a certain property or location, cash will provide a competitive edge and help to lock in Maui real estate deals.