What Is A Cash Offer In Real Estate

What Is A Cash Offer In Real Estate

In This Article:

Why Does A Cash offer On A House Mean?

In the world of real estate there are a number of ways through which one can buy or sell a home. One way is through a mortgage, which is most common in the transactions of buying one these days. One rare way is through the cash offer for a home.

Having a cash offer for my home, for instance, is when I approach a seller and offer to pay for the home through cash-no mortgage or loan to finance my purchase. Here I pay the full cash and close the transaction with simply that. This is a fast process and benefits both parties, seller and buyer, as they avoid a lot of paper work associated with buying a home.

Sellers love this option because it allows them to sell their house faster.  You might think that homeowners may seem to be the only ones that benefit from a cash offer for a house, but so do the buyers. For instance, they get the keys to the home almost immediately and they get to own the home entirely.  They do not have to make follow up payments to complete the payment.

Benefits associated with buying a home on cash offer

benefits of a cash offer on your house

Benefits associated with buying a home on cash offer

  1. It fastens the transactions

Using a home on cash offer closes the deal faster than in the case of buying on a mortgage or something else. This is because the buyer does not have to wait for his loan to be approved by a bank for them to pay for the house and this saves the seller’s time.

The buyer enjoys owning the property almost immediately as they get handed the house instantly after completing payment. 

    2. There are no contingencies involved

This is common in the traditional way of purchasing a home. Contingencies such  as  inspection of  the home, appraisal  and mortgage financing make  the whole transaction last unnecessarily  long. In the case of a cash offer the buyer may rush through the process and close the transaction early for both parties. 

Other benefits of this transaction include the fact that there are not a lot of intermediaries in the process. This is advantageous since intermediaries make the whole process expensive. Therefore, when a home is bought through cash offer, the buyer pays less than had he bought it through other methods like through a loan. The buyer is also relieved of having to pay the mortgage through every month until they complete payment.

Payment of the mortgage can be rather pinching of your monthly income. Buyers are also at risk if they fail to keep up with payment of their mortgages when required. This is because banks may come and take over ownership of the house however close they were to completing the payments.

A cash offer refers to an all-cash offer made by a purchaser to the seller of a real estate property. This for example would mean that the prospective buyer does not need any financing or mortgage. This helps give a seller a better feeling of certainly to the actual closing of the home sale.

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How is a cash offer different?

How is a cash offer different

A cash offer is quite different from buying a home through a mortgage and other financing methods. For starters, in the case of mortgage lenders, they will need a home appraisal. This is done by the lenders to reduce the risk they are in when a foreclosure occurs. The cash buyers do not need one as there is no lender in the entire process. However, the cash buyers can go for an appraisal as they too would not want to buy a home at a price less its value.

A cash offer comes across as a stronger offer than other offers. This is seen when a seller who is approached by two types of buyers, the cash buyer and the buyer. Even though the mortgage buyer may be paying more than the cash buyer eventually, the seller opts for the cash buyer as the cash is paid almost immediately and in full amount.

Cash buyers need to show the seller proof of funds before the deal is closed. This is a simple process and not as complicated as applying for a mortgage. The buyer can use a financial institution or even a bank statement as the proof of funds. This will make the deal stick as the seller is assured of the availability of the cash.

Cash sales are much lower in price than other types of sales like mortgages. Those home buyers who pay through mortgages pay extra for bank charges for credit check costs and other processing charges.

Cash buyers are not restricted in the type of houses they can go for. Restriction is seen in the case of mortgages where some loans restrict buyers to specific type of houses. The loans dictate that one can only apply for mortgage in homes that are in certain locations and which are in certain conditions.

The seller also enjoys a state of less or no risk at all as they get complete payment almost instantly. This is not the case for mortgage payments as the buyer may be unable to pay for the home and this causes rise in complications that may affect the payment of the home to the seller. 

Similarities between a mortgage and a cash offer

Having a cash offer on a house is similar to buying it on mortgage as either needs a real estate agent in the deal. A real estate agent is required to value the house and advise before the deal is made. They may also be needed in the negotiation process so that you do not pay too much for a home.

There are also some charges attached to buying a home that are similar across both payment methods. These include taxes, escrow fees as well as some closing fees. Last but not least, an inspection is needed for both cases to check on the condition of the home before buying. You do not want to be surprised about a leaking roof or an almost falling wall a few days after completing your payment on a house.


All in all, a cash payment brightens up the face of most sellers as they get cash fast. This is because due to the lack of intermediaries, they are able to close the deal as soon as possible and are not at risk of the buyer failing to pay the installments. 

If you are needing to sell your house fast, a cash offer form an experienced and professional home buyer may be your best option.  No matter if you have a home to sell in Greenville SC or  need to sell a property quickly in Boston, a cash offer is always welcomed.

To find out what we can pay for your house, click here and fill out the form or call our office at (888) 683-7909.

This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice. CashOfferOnHouse.com always encourages you to reach out to an advisor regarding your own situation.

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Don Phelps

Don Phelps

Don Phelps is Director of Marketing at CashOfferOnHouse.com, the real estate investment company that specializes in buying houses for cash in “as-is” condition. His focus is educating homeowners on navigating the complex and challenging world of selling real estate with confidence and ease. Don has worked on projects for numerous organizations and has a particular passion for real estate investing, SEO and football. Don's writing has been featured in Thrive Global, Activerain, Realtor.com, Today.com and Doffitt.com.


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