Cash purchases making it harder for people to buy a home, some buyers say they’re being ‘priced out’
Jun 3, 2021, 7:54 AM | Updated: 7:59 am
SALT LAKE CITY — Are large corporations getting in the way of people buying homes in this state? One Utah couple said they were priced out of buying a house after an out-of-state company bought some of the homes they were trying to get, but analysts don’t believe this is happening on a large scale.
Justin and Brenda Matthews have looked at over 40 houses in the last month and a half, and they don’t have anything to show for it, yet. They had to look for a place ever since their landlord decided he wanted to flip his property, so he kicked them out. Plus, they were already under incredible financial strain since their daughter had a kidney transplant.
Since they started searching, they’ve made offers on 12 different homes, and each offer was shot down. They would have made 15 offers, but Justin Matthews said their realtor told them they would never be able to afford three of those homes since other people were offering thousands more above asking price.
He said, “It’s very frustrating. There were a couple where our realtor said, ‘This is going to go for so much over that you just aren’t going to be able to compete.’”
Matthews said their realtor found out one specific company was able to be successful where his family wasn’t.
“She did some research, later, and she said at least four of them had the same LLC that bought the property,” he said.
Brenda Matthews said they were told very little information about the company who reportedly bought four of these homes.
She said, “We were told that they were an out-of-state company.”
Matthews said they were able to move in with another family, so they’re not under as much of a time crunch to find a new place to live. Still, she wishes the process could be easier.
“It’s immensely frustrating, especially since we had a time limit where we had to get out of our place and we have a daughter who is super immune-compromised. They didn’t want us to have her around other people,” she said.
The Utah Association of Realtors can’t confirm if corporations are buying homes in Utah on a large scale. In fact, their research shows the opposite seems to be happening, with most buyers intending to live in the homes they purchase. However, they are seeing an increase in cash purchases, which is making it harder for lower-income families to have their offers considered. Former association president Dave Robison these kind of purchases are very attractive to the buyer since the seller has enough money to buy the property without going through a lender. Robison said the shortage in housing has created such a frenzy, buyers are willing to do anything they can to speed up the purchase.
“They’re willing to forgo due diligence. They’re willing to forgo an appraisal and they may not know until later what was in the property,” Robison said.
Robison said buyers are also willing to offer many thousands more than what the sellers are asking for, and families that can’t afford to do that have little chance of buying that home.
He said, “It’s very accurate to state that someone who has only three percent down or five percent down, they don’t have the ability to pay above an appraisal. Those people being squeezed out… it’s definitely fair to say.”