Large Cash Home Buyers in Florida Can’t Hide Anymore
By Natalie Wise
Miami and Manhattan homebuyers won’t be able to keep their cash real estate deals under a beach umbrella any longer. The Treasury Department wants to keep an eye on these transactions, so it has introduced new rules for transparency.
Because many cash sales take place under corporations that shield the buyer’s identity, the new rules require title companies to unmask the buyer if the transaction totals more than $3 million. The new rule will also show how many cash sales involve foreign investors.
The majority of cash real estate deals happen in Florida — in fact, eight of the top 10 cash markets are in the state, with Miami as the No. 1 cash market. In 2012, 70 percent of all real estate transactions in Miami were cash. This has slowed down as the economy has improved, but 55 percent of real estate sales are cash in Miami, which is why the government is setting its sights on the details of the market.
Sarasota is the No. 2 cash market, at 53.4 percent, and in Fort Myers, 51.8 percent of transactions are in cash. In Daytona Beach, just under 50 percent of the sales are cash, while in Tampa, 47.8 percent of home sales are cash.
Cleveland is on the list at No. 6, with 45.2 percent of home sales in cash, mainly because of investors looking for deals. Then to Lakeland, where 44.7 percent of deals are done in cash. One more Midwest city, Detroit, is on the list at No. 8. Cash sales are still booming there at 44.6 percent of transactions.
Melbourne and Orlando end the list, both at nearly 44 percent.
While the new regulations on cash deals only affect home buyers in Manhattan, New York and Miami at the moment, this may change once the government gets a handle on the situation.