Understanding Cash Real Estate Transactions in the Long Beach Island NJ Real Estate Market
The LBI Real Estate Market on Long Beach Island NJ
The LBI real estate market on Long Beach Island NJ comprises the sale and rental of single family homes, condominiums, duplexes, commercial real estate, vacant land and homes damaged by Hurricane Sandy. The LBI real estate market has been an active market even with recent events such as the financial crisis of 2008-2009, Hurricane Sandy and most recently the on-going budget battles. With market activity keeping pace with 2012 and exceeding 2011, it is important to understand not only the dynamics of the LBI real estate market, but also current trends that can make a significant difference when investing in the LBI real estate market. One of the most important trends to consider are cash sales in the LBI real estate market on Long Beach Island NJ.
Cash Sales in the LBI Real Estate Market on Long Beach Island NJ
A cash transaction in the LBI real estate market can be rather common even with the high prices of real estate on Long Beach Island. Many investors are willing to cash out stocks and bonds in favor of buying an investment property on LBI as apart from the appreciation over time in the LBI real estate market, investors can benefit from continued summer rental income. A cash transaction is often viewed as superior to a transaction with a mortgage as the deal is “cleaner” with no effort or worry concerning financing.
On a national level in August 2013, cash transaction account for approximately 45% of all sales! These transactions have been viewed as aiding the national rise in home sale prices (23% higher than their lowest point) as investors have shown much interest in the housing market. While Long Beach Island did not see as equal the 45% of all transactions being cash, cash transactions were and are very common in the LBI real estate market. When receiving a cash offer, there are a few notable advantages that should be considered:
- Lacking a mortgage contingiency will often result in a swifter deal saving time and added carrying costs of owning the house (mortgage payments, taxes, insurance, etc).
- With the ongoing budget battles and government shutdown, certain types of loans cannot be processed as specific IRS documents are required that are not being processed or are being delayed
- A cash deal offers security (provided funds are proven ahead of time) in that a cash deal is not influenced by external factors like rising interest rates on Long Beach Island NJ and the LBI real estate market.
Regardless if you are a buyer or a seller in the LBI real estate market, it is important to understand the value of a cash transaction and ensure that all is only one aspect of many aspects of the deal are considered. Depending on the terms and conditions of the LBI real estate transaction, it may be better to accept a cash offer even if the price is less than a competing offer with a mortgage contingency.
Buying and Selling in the LBI Real Estate Market
Understanding cash sales in the LBI real estate market on Long Beach Island NJ is very important if you plan to invest on LBI. If you are a buyer planning on making an offer, it would be wise to explore the options of making an all cash offer. This could be accomplished by the liquidation of existing investments, cashing out a home equity line of credit or a personal loan from a family member. As a seller in the LBI real estate market, a cash offer should be considered even if it is a little lower than may have been expected. It is important to remember that the “bottom line” number, in other words the amount of money netted from the transaction, is what is most important. For Example, an offer made for $5,000 less than anticipated may be worthwhile if the offer is cash and offers a quick closing as the monthly mortgage payment, taxes, utilities and insurance bills may equal or exceed the $5,000 difference thereby netting the same amount as a higher offer with inferior terms! If you would like more information about cash sales in the LBI real estate market on Long Beach Island NJ or the LBI real estate market in general, please do not hesitate to contact me, Nathan Colmer, with any questions and it will be my pleasure to help!
Nathan Colmer | The Van Dyk Group
Cell: 609.290.4293 : Toll Free: 800.222.0131 : Email: firstname.lastname@example.org
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