Cash is always king. But if that's not an option, is a 40-year mortgage a good way for homebuyers to jump over the affordability hurdle?

First, cash: Buyers who can pay the full boat without financing have a leg up because there are no lender rules or appraisals to worry about, and therefore, little chance the deal will fall through.

Lately, in an effort to beat out the competition for the few houses that come to market, more buyers are going the cash route. According to Redfin, in October of 2022, 31.9% of all house purchases were made with cash -- the highest percentage in nearly a decade.

While it's admirable that they have enough money -- whether from savings, investments or inheritance -- to do this, do buyers really want to tie that much to a single asset? Especially one that might not always rise in value over time?

Sure, the stock market hasn't performed that well lately, mostly because the Federal Reserve Board has driven up interest rates to control inflation. And yes, earnings on savings accounts and CDs aren't what they used to be.

But eventually, inflation will be tamed, and the stock market should take off again (though savings accounts at banks may never pay as much as they once did). It's important to have some cash set aside in case of an emergency -- some financial experts suggest six months' worth of your total expenses.

It's a conundrum, all right. But there is a way for buyers to pay cash and then finance their purchases later. The little-known technique is a "delayed financing exception," offered through Fannie Mae, a government-sponsored enterprise (GSE) that buys loans from the Main Street lenders you and I deal with.

For the exception to work, your cash deal must adhere to Fannie Mae's rules. For starters, the sale has to be an arm's length transaction, meaning that the buyer and seller are acting independently and have no prior relationship. Then, you have to meet all of the GSE's borrower eligibility requirements, including a good credit score, a manageable debt-to-income ratio and an acceptable appraisal.

After that, you must act fairly quickly: You only have six months from the day you closed on the property to close on the financing.

The loan amount cannot exceed what you paid for the house, as documented by the settlement statement, plus closing costs, prepaid fees and points on the loan. And there can be no existing liens. If there are, they must be paid off either before closing or with funds from the new mortgage.

Finally, expect to pay an interest rate commensurate with what other borrowers are paying for cash-out refinancings.

Now, about 40-year mortgages: There has long been talk about 40-year loans as a way to make house payments more affordable. The Federal Housing Administration is now allowing struggling borrowers to extend their payments out four decades, leaving would-be buyers wondering when such loans will become available to the masses.

Spoiler alert: They already are, but they are not plentiful. "A 40-year is a pretty rare offering at the moment," Keith Gumbinger of HSH.com, a mortgage information website, told me. The reason: a "super-small audience and likely zero secondary market" where lenders can offload their products to investors.

Gumbinger pointed to a few mortgage companies and credit unions that write some form of 40-year loan -- mostly either adjustable-rate mortgages, in which the interest rate changes every so often, or interest-only loans.

But I found one that is no different from a conventional mortgage, save for the longer term. The 40-year loan from LoanStream Mortgage carries a fixed rate and is amortized over the full 480 months. It is available for purchases as well as refinancings, says Dallas regional sales manager Kevin McKnight.

But does a longer term really realize any savings? I asked Adam Neft, a sales manager at GO Mortgage in Columbus, Ohio, to run the numbers on a $200,000 mortgage at 5% interest. Here's what he reported:

On a 30-year loan, the monthly payment would be $1,074. But on a 40-year term, the payment would be $964 -- a monthly savings of $110. That may make a big difference in the short term, but over the decades, the difference in interest payments is staggering.

On a 30-year mortgage, held to term, the borrower would pay $187,290 in interest. The 40-year borrower would pay $263,330 -- a difference of $76,040! Over the same period, the total monthly savings is just $52,800, meaning you'd pay more in interest than you'd save by lowering your monthly payment. Moreover, the biggest chunk of interest comes in the earliest years of a mortgage.

Looked at another way, the total interest paid on the 30-year loan comes out to about 93.5% of the $200,000 borrowed. But on a 40-year loan, the total interest is almost 132% of the loan amount!

Of course, few people actually hold their mortgages for the full term. They either refinance or sell. So it's more likely that those who opt for a 40-year loan will jettison it long before the final payment is due.

Gumbinger agrees that "a refinance at some point is a virtual guarantee," and advises anyone considering a 40-year mortgage to make sure there is no penalty for paying the loan off early. And if there is, make sure you know exactly what it will be.

Whether self-proclaimed real estate “mogul” Donald Trump is actually the tycoon he proclaims to be is up for debate. But according to a new report, people who have purchased apartments in Trump-developed condominiums haven’t done so well, at least not in the last few years when prices have skyrocketed.

A look by Realtor.com at transactions in the properties that carry the former president’s brand found the numbers to be decidedly underwhelming. Prices for the apartments in his buildings “have either declined or appreciated at a slower pace than the local markets they’re in,” according to the official listing site of the National Association of Realtors.

Citing data from the CoreLogic analytics firm, the study found that while the median price for condo sales between 2019 and 2022 rose 38%, the median at Trump-developed properties declined 14%. Not one of the properties the ex-president built outperformed the market where they are located.

The issue: Likely because of Trump’s multiple legal problems, the name no longer commands the prices they once did. In response, some buildings have taken steps to remove the Trump name from their marques in hopes of separating themselves from the Republican standard-bearer.

But at the same time, the report notes, the buildings, which are said to be some of the best managed in the Big Apple, are so old that they have a tough time competing with newer properties offering all the trimmings that come with more modern places. Trump hasn’t built anything in years in the city.

Take Manhattan: Since just prior to the pandemic, prices at Trump buildings have slid about 16%, according to the Realtor.com analysis. Over the same period, the value of all condos in the borough have risen roughly 11%.

In South Florida, owners of the condos he built have done better. They went up by about 15% between 2019 and 2022. But during the same period, prices in Miami-Dade and Broward Counties shot up 50%.

With the paucity of existing houses coming to the market, new construction has become largely the only game in town in many places throughout the country. And builders appear to have taken notice.

According to new data from the industry’s trade group, the share of builders who are reducing their prices has slipped every month since November. Now only 3 out of 10 are dropping their prices, and then only by 6%.

At the same time, the National Association of Home Builders reports that slightly more of its members have been using mortgage-rate buydowns, giveaways and other incentives to bolster sales of late. But at 54%, it’s still fewer than the 62% who were offering freebies and the like in December.

Whether this trend will hold remains to be seen. Mortgage rates, after all, have forced many a would-be buyer to the sidelines. But the limited resale inventory has increased demand for new houses. And as a result, builder optimism has grown.

Currently, the NAHB says, a third of unsold houses is new construction, compared to historical norms of a tad more than 10%.

More than 2.4 million taxpayers claimed at least one residential energy credit for the 2020 fiscal year, the most recent year for which data is available.

That’s far from the some 7 million who claimed an energy credit in 2010, but tax returns claiming the credit have been rising again since 2018. And in 2020, the Internal Revenue Service says nearly 9 out of 10 owners who claimed one had adjusted gross incomes of less than $200,000.

The tax credits were enacted by Congress in 2005, one for retrofitting and remodeling existing houses and another for installing alternative power sources in new and existing houses.

As in prior years, the most prevalent redo in 2020 was the installation of more efficient windows. People also switched out their water heaters, added insulation and changed their exterior doors. To a lesser degree, they also put on new roofs, which is the most expensive of all these upgrades.

Since 2012, nearly 3,000 houses a day have been built nationwide, according to a new analysis from Point2.

It’s hardly enough to keep up with demand, though. And the Point2 study says builders are losing ground, not gaining. (Full disclosure: Point2 in part of Yardi Systems, which also owns Multi-Housing News, a trade publication to which I contribute on a regular basis.)

The National Association of Home Builders says between 1.3-1.5 million new houses a year are needed to satisfy buyers. But the number of permits and construction starts took a downward turn last year.

The number of permits issued nationally crossed the 1-million mark in 2014 and has increased every year until 2022, when the first decline was recorded. The fall off was almost all for single-family houses. A permit indicates a plan to build. But it doesn’t mean much until dirt is finally turned: a start. And starts have followed the same trajectory as permits.

For what it’s worth, permits are far from evenly distributed, Point2 acknowledges. Three states -- Texas, Florida and California -- accounted for more than a third of the permits authorized last year.

Florida has recently outlawed foreign ownership of real estate. Some states prohibit foreigners from owning agricultural land; others block them from owning property around military installations while some deny ownership of any land. Some laws apply to all foreign governments, some to certain countries and some to foreign nationals.

The toughest part of buying a house isn't finding the ideal place or locking down financing. It's actually making the offer -- not just the monetary part, mind you, but deciding what to include and what to leave out.

Do you want to offer what the seller is asking, or do you want to offer more? Then again, depending on market conditions, you might want to offer less and see if the seller is willing to bargain.

Beyond that, though, you must decide if you want to protect yourself by making the sale dependent on, say, a satisfactory home inspection, an appraisal, or even your ability to secure a mortgage at a specified rate.

Maybe you want to make the deal contingent on the sale of your current house or your ability to break your lease. You also might want to include something about timing: the closing date or preferred move-in date, for example. And you might consider asking the seller to pay at least a portion of your closing costs.

In real estate, everything is negotiable. Your agent should help you decide how to proceed with these and other decisions. But perhaps the most important consideration for buyers is how you think the seller will respond.

The seller could accept your offer as written -- "the best of all considerations," says Montana broker Kat Palmiotti of eXp Realty -- or they could reject it without blinking an eye.

Most often, though, they will counter with an offer of their own -- maybe at a somewhat higher price than you offered, but changing nothing else. Or perhaps they'll accept your price but change other elements. Even if they change everything, the good news is that by countering your offer, the seller is saying they are willing to bargain.

On the flip side, though, if there is too much back-and-forth, the deal can get bogged down until it simply dissolves without any kind of resolution. Or, while you and the seller are trading proposals, another buyer can swoop in with a better offer and take the house out from under you.

Parrying with a seller is "part of the game people play" in real estate, says retired agent Carol Williams in Wenatchee, Washington. "But it's not without risk."

Some agents, like Doug Dawes of Keller Williams Realty in Topsfield, Massachusetts, believe that there can never be too many counteroffers. After all, another counter means there may still be some wiggle room.

Donald Payne of Vision Realty in Columbus, Ohio, tells his clients, "Never let a contract die unless it's simply ridiculous."

But negotiations sometimes go awry. One time, Anna Kruchten of the Phoenix Property Shoppe was up to six counteroffers when the seller became so frustrated that he started crossing out more items in the buyer's latest offer than he had in previous ones. The buyer walked, and the "hardheaded" seller waited "quite some time" before he found another buyer.

Chuck Willman of Utah Homes in Alpine can top that, though. He has seen 14 counteroffers -- a battle that ended with just $1,500 separating the parties on a $1.1 million transaction and neither side willing to budge any further. The buyer and seller were both so angry, Willman recalls, that they wouldn't even accept an agent's offer to make up the difference out of his commission.

"It was probably for the better," he says. "The two parties had such resentment that an accepted offer would have been just the first of many disagreements."

Mike McCann, a Nebraska farmland broker, once worked with a buyer who insisted on countering "despite my warnings." And sure enough, a stronger offer came in, and the buyer lost out. "That was an expensive lesson," he says.

Some buyers sit on a counteroffer from the seller, whether to decide how to proceed or to put a little extra pressure on the seller. But in doing so, warns Amanda Davidson of eXp Realty in Alexandria, Virginia, they put themselves in jeopardy of losing the deal.

Losing the deal while bargaining with the seller happens more often than you might think.

"Time opens the opportunity for another buyer to tour the home and write an offer," says Willman. "The odds of you being the only buyers ... interested in the home are low -- nonexistent, in some markets."

And it works the same way with sellers. "I often tell sellers not to sit on an offer, as a buyer might very well move on to another property," says Nina Hollander of Coldwell Banker in Charlotte, North Carolina.

Buyers and sellers alike should rely on their agents' expertise as they guide them through negotiations. And as you go through the process, keep your emotions in check. Remember, the house you are buying or selling is still essentially a product, and the goal is to come to an agreement that both sides can live with.

To protect yourself, though, make sure there is no confusion about what you are agreeing to. Read all the clauses in the contract carefully before you initial them. And if you've gone back and forth several times, consider rewriting the agreement into a brand-new, clean contract.