How Financing effects the List Price to Sales Price
At our Business meeting on February 24th I shared with our team that there had been 864 sales closed in our Charleston Multiple Listing Service in the first seven weeks of the year. So the question was,
“Could anyone guess how many were FHA Sales. (Goverment Lending).” A great deal of numbers were thrown out, some of the agents came pretty close. The answer were 127 and they were selling at 96.74% list price to sales price. The next question was, “How many were Conventional?” The answer was 394 although they were selling at 91.84% list price to sales price. Approximately 5% lower.
Next came “How many VA?” (Veteran Loans).” 65 were VA financing with 97.34% list price to sales price.
The Surprise to everyone, was the next question. “How many were Cash?” The answer was 168 list price to sales price 86.12% This was a surprise as I don’t think any of the agents expected it to be as high as it was. Which does tell us that there are cash buyers out there looking for good deal.There were a couple with Farmers Home, some listed as Other,which I can only assume was rent with the option to buy and some were owner financing. Owner financing is a good option for the seller as he makes money with the interest rate, however, my caution is, you can only offer owner financing if you do not have a mortgage, or have the permission of the bank who is holding the mortgage to allow a second mortgage to be held by the seller.
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