Here's a way to save big on the purchase of your next house: Pay cash. RealtyTrac said that cash buyers received a nearly 10 percent discount from the average market value during the third quarter. Institutional investors, those entities that bought at least 10 properties during a year, got an even bigger discount. They saved 15 percent. The report also shows that with fewer foreclosures in the market, investors are fleeing the market. They represented just 4.3 percent of all sales during the last quarter, a four-year low.
"Cash sales continue to be an important piece of the real estate puzzle right now, representing one in every three home sales nationwide in the third quarter of 2014 and helping to drive up U.S. median home prices 38 percent over the last two and half years," said Daren Blomquist, vice president at RealtyTrac, in a press release. "As institutional investors and other cash buyers slow down their purchasing in many markets across the country, more traditional buyers — including first-time homebuyers and move-up buyers — will need to increasingly fill in the missing puzzle pieces to maintain the momentum of the housing recovery."
These cash sales represented nearly 55 percent of transactions involving homes that were bank-owned or in foreclosure, and 33.9 percent of single-family and condo sales, down from 36.9 percent during the previous quarter and unchanged from last year. In Minnesota cash sales accounted for 22.5 percent of all deals during the quarter, down from 29.4 percent in the previous quarter and 33.6 percent last year.
Here's what's most interesting: Cash sales were concentrated at the lowest and highest ends of the price spectrum. They accounted for 64 percent of sales under $100,000 and 41 percent of those that sold for more than $2 million.
