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Miami Beach buyers turn to all-cash deals
From The Real Deal
By The Real Deal, Friday, July 23, 2010.
Editor's note: This article is reposted with permission by The Real Deal. Click here to view the original article. By ALEXANDER BRITELL
Reluctant banks have led to a new wave of buyers in Miami Beach real estate -- those looking for quick, all-cash deals. With financing not just difficult to obtain but also time-consuming, sellers are looking to move their homes faster, and buyers, with cash lining their pockets, are ready to move on deals.
As has been the trend in Miami Beach, the new all-cash buyers are Europeans armed with easily accessible funds and eager for quick deals on higher-end properties.
"With the state of the market being what it is, it's typically a 30- to 60-day process for financing," said Peter Zalewski, founder of Condo Vultures Realty. "If you want to come in with financing, you're going to have to put in a 15 to 20 percent premium. The seller would rather take less money and move it in 20 days."
Nelson Gonzalez, senior vice president at Esslinger-Wooten-Maxwell, said he has gone almost two years without buyers making a financed deal.
Many of these buyers are looking for second or third homes, so federal financing and tax credits were not an option -- just cash.
"People that have the cash are coming in out of the sidelines trying to make deals," he said. "Two years ago, the banks weren't lending, so that was the biggest issue.
Now, the money's there, they're just looking for deals," he added.
Gonzalez noted eight sales made on prestigious North Bay Road, in February of this year alone.
The trend is not limited to single-family homes, either.
Of 713 condo units in the Miami market that closed, 83 percent were all cash, according to a Condo Vultures study earlier in the year, at the end of the first quarter.
"People are buying all-cash," said Realtor Yolande Citro. "It's very difficult to get a loan right now. I work with a lot of Europeans, and it's still a good deal with the euro; a lot of buyers are European, and being from the Old World, they like to buy cash."
Some of the most expensive deals in Miami Beach's condo market in the last quarter and a half were paid for in all cash, like three sales at the Apogee of more than $4.2 million and the sale of Penthouse B at the Setai for $15 million, according to Diana Garchitorena of Setai Realty, the exclusive sales and marketing arm for the project.
"Because everyone wants to be in Miami Beach, all-cash is the way to get in," Zalewski of Condo Vultures said.
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