By Alex Veiga, AP Real Estate Writer
LOS ANGELES (AP) — Melissa Hughett and her husband set out to buy their first home in the best buyer's market in years, confident they would land a deal within a few months.
The couple put offers on several homes, but lost them all to rivals who weren't offering more money — just a lot more cash.
"Each time somebody came in and put $100,000 down in cash and scooped up the property or they had enough money to pay for the whole property in cash," said Hughett, 30. "It's agonizing."
Would-be homebuyers, armed only with financing, are competing with real estate investors with the means to pay for a home in cash. Often, the all-cash buyers are edging out everyone else, leaving many frustrated at a time when lower prices and tax incentives favor buyers.
The market scuffle is happening primarily over heavily discounted foreclosed homes and other properties typically less than $300,000, or even well below $100,000 in some markets. These homes are attractive to investors seeking a good return and first-time buyers looking for an affordable home.The trend is most pronounced in areas of California, Florida, Arizona, Nevada and elsewhere where home prices have dropped sharply and foreclosures make up a large slice of homes for sale in many metro areas. In Las Vegas and Phoenix, for example, foreclosures accounted for more than half of all home resales in December, according to MDA DataQuick.
Although getting financing for heavily damaged foreclosures can be difficult, there's still a healthy competition. Ultimately, cash is king.