Remember the old
saying “cash on the barrelhead”?
No credit. Just
pay cash when you buy.
More and more
home buyers are doing just that.
across the country made up about 38 percent of all home sales in
November, according to the most recent data from the online real
estate firm CoreLogic.
The share of
all-cash sales reached a peak of 46.6 percent in January 2011,
according to CoreLogic, which cited new documentation and disclosure
rules for mortgages that took effect in October as motivating
County, real estate professionals say the percentage is increasing,
but it’s nowhere near that national mark.
“I would have to
go in and look at MLS numbers, but I don’t think it’s a huge
number,” said Tom Sykora, an agent with the Coldwell Banker office
in West Bend and a board member of the Greater Milwaukee Association
of Realtors. “My best guess would be probably under 5 percent.
“We have been
seeing more cash offers this year than what we saw last year,”
Sykora said. “I do think we’re starting to see that trend up a
Sykora said in
some cases, cash buyers are couples who have sold a home and are
“I had a cash
closing on Friday,” he said. “The people were coming up from
Illinois, they were downsizing and they wanted to be mortgage-free.
They sold their house in Illinois, downsized and paid cash.”
RealtyTrac, an online seller of foreclosed and defaulted properties,
cash buyers are motivated by two main factors: strict lending
standards that make it difficult to get a mortgage and intense buyer
typically sell below market value.
A factor in some
markets is purchases by foreign buyers. More than half of foreign
home buyers pay in cash, according to the National Association of
Realtors. In Miami, the No. 1 market for foreign purchases in the
United States, cash purchases are nearly 60 percent of all sales.
prompted an investigation by the U.S. Treasury Department, which has
ordered title insurance companies to report the identities of people
paying cash for high-end properties in Miami and Manhattan.
if people who pay cash for real estate in some markets are trying to
hide ill-gotten gains through the drug trade or other illicit
That seems less
likely here, though.
Sue Jonas, sales
director at Shorewest Realty in West Bend, said cash transactions
were “probably a strong 10 percent” of sales here.
“I wouldn’t say
it’s common, but I’m seeing more and more of it in all price
ranges,” Jonas said.
with Sykora’s observations.
have already closed on the property, thus giving them the cash,” she
said. “Your lake homes are a little bit of a different animal
because that’s usually a second home.”
Sykora added the
volatility of financial markets could be a contributing factor.
With wild swings
in the stock market over the past several years, some people may be
hoarding cash, then investing in real estate when an opportunity
“Real estate has
always been a fairly stable investment,” Sykora said. “Obviously we
had the market turn a couple of years ago, which was unusual, but,
typically, real estate is a steady investment over time.”
Email news editor Ken Merrill at