According to a recent study from NAR, international buyers are investing in U.S. markets and the hottest areas for Chinese buyers are Irvine and the Los Angeles San Gabriel Valley. It’s not surprising because there are already several Asian-immigrant communities in these areas and right now our housing market is looking good.
Chinese foreign investors are attracted to the Southern California real estate market because they see our economic stability and attractive prices - values are still coming up since the market bottomed out a couple years ago.
According to NAR President Steve Brown, “We live in an international marketplace; so while all real estate is local, that does not mean that all property buyers are.”
These Chinese foreign buyers usually buy in cash – in 2014 about 60% of international transactions were in cash as compared to only one-third domestic purchases. Why do foreign buyers use cash? Well securing a mortgage loan in the here requires U.S. based credit history, a Social Security number and other financial information, which new comers and noncitizens don’t have. The solution therefore is buying homes outright without the complication of a mortgage.
Cash buyers can be tough competition when you’re trying to buy a house however that doesn’t mean you’re out of the running on your dream home. Here are a couple tips when going up against cash buyers:
- Set yourself up as a strong buyer. With a good credit score, 20% down payment and steady job, any seller would be happy to choose you. Keep in mind, cash buyers and foreign investors are often looking for a deal so their offer might actually be lower than yours.
- Shy away from contingencies. Contingencies in your purchase offer benefit you however if you’re up against cash buyers it’s best to keep your offer as simple as possible. Most sellers choose cash buyers because they believe it’s less complicated.
- Sweeten the deal. Find out the seller’s motivation and give them what they want. If you and your agent can understand the driving force behind the seller then you should be able to accommodate and win against any other buyer – cash or not.
Originally posted at: http://www.firstteam.com/blog/?p=8921
