It’s no secret that the trend in sought-after neighborhoods like Noe Valley is for buyers to pay cash for a home—and that doesn’t mean getting a discount, either.
The latest bidding war occurred for a renovated Victorian at 1566 Sanchez. The 5BR/4BA home had LEED Platinum certification and was listed for $2,395,000 (see photo, left).
Within a week, the seller had received five offers and the home is reportedly in contract for roughly $2.8M in an all-cash transaction that’s expected to close any day now. (This sale was on the heels of the one around the block at 171 Valley, a 5BR renovated Victorian with a white exterior that sold for $3,010,000 in cash in September 2011.) Apparently, the 1566 Sanchez buyers felt comfortable paying $400,000 over the asking price with that comp in play.
And that’s not the only example of this sort of activity. I recently reported the sale at 482 Liberty, the 3BR/2BA condo listed at $1,699,000 and sold within a week for $1,850,000 in cash. But the hot and heavy activity seems to be happening most frequently in the single-family home market.
A quick look at year-to-date, single-family homes sales in the $1.5M+ range reveals that at least one such property has reportedly sold for all cash in neighborhoods as varied at Sea Cliff, West Portal, Cole Valley, Ashbury Heights, Clarendon Heights, Presidio and Pacific Heights, Cow Hollow and Telegraph Hill. 3636 Washington was sold to an all-cash buyer for $10M.
Cash sales have never been uncommon in major cities like San Francisco and New York. However, what impresses me lately is the overbidding in these situations. This goes against the traditional way of thinking that paying in cash will get you a “deal.” Apparently, the buyers out there are more concerned with getting what they want than getting a deal.