Q: How much of an advantage does paying all cash play in purchasing an apartment?
A: Cash terms can provide a significant advantage for a buyer that sometimes even lead to a discounted price. In the current market, mortgage lending standards remain historically tight, so the terms of a sale—such a financing—have become just as important as the price that both parties agree to. Sellers have become acutely aware that getting a higher price isn’t worthwhile if the buyer can’t close because they can’t get a mortgage. In other words, we are seeing discounts for cash purchases, but there is no standard rule of thumb for the amount of the discount, if any. Cash terms can also give you an advantage if you and a competing buying with a mortgage have offered the same price for a house—a seller will generally place the cash buyer in front of the mortgage buyer in this situation. Your real estate agent can guide you on the most strategic approach to a specific transaction.