You are only risking 20% of the price. The bank is risking 80%. Cash buyers are risking 100% of the price. Sellers are risking bigger losses when your bank takes 2 months to tell them that they won't give you the money you think you're qualified for whatever reason. 20% down doesn't mean so much when the house loses 20% equity in months, then the "buyer" decides to walk away from the payments and stick it to the bank. 20% down only works when property values are stable or rising with little or no chance they will fall during the term of the loan.
This is what happens when state law allows homeowners to walk away from a mortgage through foreclosure and bankruptcy. Even though you are probably a good risk on an individual basis, on the whole, all buyers using mortgages pay the penalty for those who default in one way or another. Cash buyers never default on their own money, and they can close in weeks instead of months without the approval of anyone but themselves.
I'm seeing condos in the IE that are very well suited for families that can be purchased for cash using that 20% down payment for a single family house. They are priced less than two family cars. Condos can be great for kids, since you can get useful community benefits like swimming pools without paying the full expense yourself of maintaining it. Condo HOA fees also usually include landscaping and building insurance. So while I can understand the frustration of buying an expensive single family residence with big yard using financing, I think that many renters try to shoot too high for their first purchase miss the benefits of buying a "rent-free" apartment as first step to getting the bigger "dream" house in a later purchase in less than 10 years. Maybe you won't feel such animosity towards people buying with cash if you realize you may be able to do it yourself if you set your sights to home instead of house.
