Cash Buyers in Florida
By OPLawSocialMedia on Real Estate
Roy Oppenheim discusses the rising trend of cash buyers in South Florida’s real estate market. This phenomenon, in which people purchase property outright instead of borrowing money, has significant implications for both the real estate and insurance markets. Since cash buyers aren’t borrowing money, they aren’t required to purchase typical insurance policies and can decide the extent of coverage they want, affecting their risk level and deductibles. Cash buyers have been largely unaffected by the increase in interest rates, which has negatively impacted those relying on loans. This dynamic has made the real estate market more favorable for cash buyers and led to a decrease in property prices. Currently, cash buyers account for about 35-40% of all closings, making them a preferred client type for real estate attorneys and sellers.
Hi, Roy Oppenheim, from Oppenheim Law. An interesting phenomenon’s been occurring really over the last several years in South Florida, and we’re finding that there are so many folks who are now cash buyers, and that has tremendous implications to the real estate market as well as the insurance market. Many of these buyers are not necessarily buying the typical insurance that historically you would have to buy if you were borrowing money. So, for example, if you’re on the east side of town, you may decide not to get any insurance, or you may only decide to get insurance for liability, and maybe for fire and for theft, but you won’t get wind insurance. Or you’ll decide to try and get all that insurance if you can and spend a fortune.
But because you don’t have a lender, you are free to decide, you know, what kind of deductible you’re gonna have, and what kind of risk you’re willing to take. At the same time, it allows sellers to actually be able to sell their property if someone’s buying for cash. But the cash buyers have really been impervious to the increase in interest rates that we’ve seen. If you’re borrowing money, obviously your ability to buy a more expensive home has been curtailed, but if you’re a cash buyer, it’s actually been helpful to you because the market’s gotten softer. Prices have come down a bit, so this has now become a cash buyer’s market, and probably around 35, maybe 40% of all our closings right now, are people who are cash buyers. So, we love representing cash buyers, sellers love cash buyers, and real estate attorneys love cash buyers. Roy Oppenheim “From The Trenches.”