Cash is KING with These Condos

For the majority of the thirteen years that I have been a real estate agent, ‘cash’ buyers got no better concessions than a typical buyer who was getting a loan.  After all, in a normal market a pre-qualified/pre-approved borrower, working with a good lender, was ALMOST as good a risk as a buyer claiming to have cash for the purchase.  As far as the Seller was concerned there was little reason to offer a better deal to the cash buyer.

That has changed, at least in some urban condo communities.  I have written before about certain urban communities where lenders are not willing/or are unable to loan money for purchases.  At the time, I suspected that prices would suffer greater at those communities.  Well now, it seems that there is evidence to suggest that is the case.

Edgewater at Hayden Ferry, in Tempe is one of my favorite urban communities.  I love the location and the style, the building seems to be extremely well-built, and it seems to be very well-managed.  Unfortunately, due to several things beyond the control of management, lenders will not loan money there to condo buyers.  Because of this, prices have gotten pummeled.  A good example of this is a two bedroom condo with over 1600 square feet on the sixth floor of Edgewater, with fantastic upgrades, that just sold for $220,000.  That’s less than $140 per square foot for commercial grade construction in one of the best locations (IMO) in the Valley!  The property originally sold for $835,000 less than four years ago.  Now, I don’t typically look at previous sales prices to determine whether a deal today is great or not, but in this case I think it is significant.  While we have seen many properties sell for 40 or 50% of their original sales prices it is unusual to see a Class A property sell for 26% of the original price.  Clearly, the reason for such a significant drop is because buyers must pay cash at Edgewater….fewer Buyers leads to lower prices.  I believe that it is just a matter of time, probably very little time, before lenders will loan money to buyers at Edgewater.  When that happens, I believe that prices will begin to trend upward.  Are we at the ‘bottom’?  I don’t know.  But for those of you who have cash to spend, buying a fantastic two bedroom condo with fabulous lake views for $220,000 sure makes sense to me.

About the author

Will Daly Will Daly has specialized in selling and leasing high rise condos and other urban property since 1997... before urban was "in" in Phoenix. His company, We Know Urban Realty has helped more urban buyers, sellers, renters and landlords than any other real estate office in Phoenix. Connect with . If you are ready to talk to an agent about the Urban Lifestyle Click Here

26 thoughts on “Cash is KING with These Condos
Mike Seebinger

I work the condo market in Minneapolis MN. The best deals seem to be cash buyers that are ok taking the risk of investing in a unit within a building under some form of litigation, hence lacking the ability to finance. Otherwise I agree that the cash doesn’t have as much leverage in a conventional sale, or at least not as much as buyers think.

Towing Sacramento

I agree that area in Tempe near the University and so close to downtown Phoenix and Scottsdale is a steal at low 200′s. The HOA is a bit high but that is to be expected in downtown high class living… would save that in gas per month.

Rca Ieftina

What surprised me was, when a buyer decided to purchase it by cash it will be lesser compare to a the buyer who will buy it by loaning. Or maybe is just me..

Corona houses

All cash offers always king over any financed offer, one less hurdle to cross. One less contingency that needs to be removed from the transaction-taking place.

short sales in california

The largest public employee pension fund in the United States is CalPERS. CalPERS has approximately $218 billion worth of assets. CalPERS suspended the program that offered assistance and mortgage to CalPERS members. This decision was taken as the organization observed that the members are no longer taking interest in the home loan program. This was leading to increasing costs and risks in maintaining the program. George Diehr is Chair of theCalPERS Investment Committee. He said that this change allowed them to reallocate their resources and manage to reduce the risk to the Fund.

Washington DC Personal Injury Lawyer

I remember seeing an advertisement in a newspaper about a house for sale. It actually has two prices, the first price is for those who will buy it through loan and those who will buy the house with cash. When I took a good look at it, they have different price depending on how you are going to pay for the house. What surprised me was, when a buyer decided to purchase it by cash it will be lesser compare to a the buyer who will buy it by loaning. Well, I guess that speaks about it, we can really save if we plan to buy something with cash.

Irvine Homes

I’m surprised your experience is cash buyers got no better concessions than a typical buyer who was getting a loan in the past. I represent buyers all the time and getting the loan funned is always the number one problem. If they are a cash buyer it’s an easy sell, no loan, no problems.

Minneapolis homes

I have heard that in Las Vegas (probably the worst market in the country) it is impossible to buy any bank owned home or short sale without cash. Apparently, many loans are getting rejected because of declining values and, of course with even fewer buyers, values can only go down.

Laura "Ole" Olesen

Certainly the inability to get financing effects prices! And cash CAN get good deals in some of these condos that aren’t approved for conventional loans. (It doesn’t seem to be making much of a difference with banks for short sales, however!) I hate to see the original owners lose their equity like that but getting occupants in the building certainly helps stabilize the ability to get financing.

Search Austin Homes

Cash is king also these days because getting properties to appraise has been a problem.

Calgary Web Design

Absolutely! If you have the cash then go for it,it’s very affordable when compared to the original price.

free baby website

This is true. Values will rise as the available of money increases.

Houston Criminal

I got good information through this post.I’m very much impressed , good picture too.

Salt Lake Homes

I have been informed by this post of which shows the current trends in the real estate market. Paying a certain a property in cash is good most especially in terms of maintenance and other aspects that may involve upon getting the condo right away. I like the features of the properties. Keep it up!

Las Vegas condos

We have the same thing going in Las Vegas, if you have the cash you can get condos for soooo cheap right now!

Jacksonville Homes

The post shows the current rends in the real estate industries. To get a nice property for a fine living we have to pay much and needs lot more for the maintenance so we can tell like cash is king, but I found the property sale price has been decreased in 2010 than 2009.

Sports News

I agree that the potential real estate buyers can never compete buyers who have to invest through loans!

dipinti olio su tela

I am well informed with the post. I never been there in the Edgewater but as I look in the picture, the place is somewhat well managed and maintained! I love the view especially if you will be having a unit in the sixth floor!

Lana

Many people find that they are innovative, useful and valuable. That does not mean one shouldn’t use caution when considering ownership on the condos.

Austin Owner Finance

Funny i came across this… i just acquired a cash buyer today looking at a 400k home here in Austin and for a second i got really excited. Until i realized his offer won’t look any sweeter than the next guy who can get a bank loan. Im still new to real estate so im learning as i go. Although, cash buyer doesn’t need to deal with the hassle of approvals etc.

Windham Real Estate

Informative post. Real Estate is having a big part on the business world, on real estate, selling is not as easy as eating peanuts, you need to have the guts, proper marketing and being honest on what you are selling but definitely real estate is really a great investment because it gives a lot of opportunity.Brainard Ridge Realty is a full-service real estate brokerage and development company, specializing in Timberframe and Custom Log Homes.

Property Marbella

Cash is King is so right this day. Here over in Marbella in Spain, one of the best places to invest in whole Europe has we the same problem. The banks and finance companies don’t give any or very little mortgage to clients, some bank have a maximum of 140.000 Euros. That’s nothing, when most of the apartments and villas we have for sale is from 400.000 Euros or more, often around 600.000 – 800.000 Euros. So I agree with you to 100%, Cash is King today.

John

Question answered. I see it’s listed for rent now. Oh well.

John

My comment in your other blog post spoke directly to this fact. As the last person to put 605 under contract prior to its sale and attempting to get a lender to loan on it, I knew the situation all too well. Congrats to the cash buyer who ended up getting the unit, it really was a nice unit. My wife and I really hoped to get it and tried all routes we could to no avail. We wonder if the buyer is actually going to live in it like we hoped to, or if they were just seeing it as a great investment.

Bill

Umm…I just saw an Edgwater 6 floor place selling for $400,000 somthing and about 1600-something Sq Ft with HOA of $993 per month. That’s higher than my rent on one of the apartments I’m renting. Ok!

Bill

Yes when loans become available, the prices should go up. Makes sense to me. In the meantime, I wonder what the HOA fees are?

Comments are closed.

Stay tuned in by checking in. Follow us at...

Add me to your circlesFriend me on FacebookFollow me on Twitter

Like it? Share it...