All-Cash Condo Deals Rise in Popularity

When the New York City real estate market slowed last year, mortgage financing became less appealing for some home buyers. As a result, all-cash deals rose in popularity. To understand the underlying forces driving this trend, The Real Deal analyzed data from ACRIS condo purchases over the past two years. Here’s what we found.

All-cash home sales are becoming more commonplace in the New York City real estate market, especially among high-net-worth buyers and foreign investors. These investors are more likely to purchase a property without using a mortgage because they can close quickly and avoid elevated interest rates. Additionally, they can negotiate a discount for paying cash, which could offset any transaction fees they may incur.

The most notable change in the New York real estate market is that more homes are selling for all-cash, especially luxury properties. In 2024, NYC iBuyers are reportedly purchasing properties for 30% to 70% of fair market value. While this is a significant discount from the traditional listing price, it can make it easier to sell your property in an accelerated timeframe.

Many of these cash-for-homes companies buy distressed properties and renovate them before selling them on the open market. In addition, some buy-and-hold companies convert distressed properties into rental properties for a steady stream of income. The influx of new investors into the market has also helped drive prices higher. According to Miller Samuel, Manhattan prices have risen nearly double the rate of the overall market since the end of 2019.

There are some disadvantages to selling your Cash for New York Property home for all-cash, but there are ways to minimize them. For example, you should always obtain a professional valuation of your property before accepting any offer from a cash buyer. This will give you a benchmark against which to compare other offers and ensure that you’re receiving a fair price. Additionally, you should consult with a tax professional to make sure that your sale is properly reported.

As part of the closing process, you’ll need to complete a number of important documents, including a Property Condition Disclosure Statement and an RP-5217 Form Real Property Transfer Report and TP-584 Form Tax Prepayment Statement. You’ll also need to submit a 1099-S form to the IRS for reporting the proceeds from the sale. Ambiguities in these forms can lead to costly misunderstandings and audits, so it’s always best to have an experienced tax professional guide you through the process.

If you’re interested in selling your home for cash, contact Houzeo’s team of expert Realtors to learn more about the process. We can provide you with a free, no-obligation market evaluation and connect you with the best cash buyers in the area. To get started, just enter your property details on our website.