What Is a Cash Offer in Real Estate? Here’s What You Need to Know

Who makes cash offers in real estate?

The first is pretty simple: a traditional buyer with liquid assets to pay cash. These are individuals or families who are purchasing a house or condominium for their living space. A traditional buyer might have this cash ready for a home purchase if they’ve recently sold their last home and held onto the cash from the sale to avoid a mortgage on their new home. Additionally, they may have saved or inherited enough money to purchase the home outright.

Many direct buyers and iBuyers will also purchase houses with cash. These companies generally aim to purchase a home without financing and close quickly so they can rehab or flip the property and turn a profit.

Sellers hoping for a cash transaction rather than a mortgage-involved sale may benefit from HomeLight’s Simple Sale. After you answer a few short questions, we’ll provide you with a competitive offer that helps you sell quickly. Since there are no hidden fees or agent commissions, you’ll have the confidence that you’re selling the fastest way for a competitive cash offer.

Why are cash offers great for sellers?

Cash offers are great for sellers for many reasons. Here are two main ways that sellers can benefit from a cash sale compared to traditional sales in which the buyer needs to finance a mortgage:

• Speed of transaction: This is particularly true when you use HomeLight’s Simple Sale platform, which can help you close in as few as 10 days, not months. Cash sales involving direct buyers, flippers, or iBuyers can dramatically cut down the average of 42 days that it otherwise takes to close on a traditional sale.
• Less risk: A buyer proposing an all-cash offer may be willing to waive an appraisal, which mortgage lenders will often require to ensure they’re not financing an overvalued asset.

It’s easy to be tempted by a cash offer for your home. After all, what could be better than a quick sale for a great price? Some research shows that cash buyers pay an average of 12% less than financed buyers, as financed buyers are more likely to have to compensate for the risks to the sale that come with a mortgage in the form of a higher offer. Working with a top agent like George Kypreos of Las Vegas, Nevada can increase your chances of selling for your ideal listing price.

In Kypreos’s market, “cash offers are paying just as much as financed offers,” he says. “If I had the choice, I would rather entertain a cash offer because there’s just less red tape and risk.”

Because experienced real estate agents keep up with market trends and are experts in their respective geographical areas, partnering with a top agent can significantly increase your chance of selling for top dollar. Plus, the general population is aware of how a great agent can speed up and smooth out the process! According to NAR, 89% of homebuyers worked with an agent or broker in 2023.

Why are cash offers great for buyers?

Cash home sales aren’t just great for sellers — they also provide many benefits to homebuyers. Cash transactions accounted for 41.1% of single-family home and condo sales nationwide in Q1 2024, so non-mortgaged transactions are hardly a thing of the past. However, it’s still important to weigh the pros and cons of buying a house for cash.

Here are a few ways that a buyer can benefit from a cash purchase:

• Lower purchase price: Paying cash for a house can save you money on the listing price. Sellers are often willing to accept a lower cash offer for a fast and hassle-free sale as opposed to dealing with the sometimes months-long traditional sale process.
• No mortgage interest: One huge benefit to paying cash for a home is that you don’t have a monthly mortgage payment. According to NAR’s April 2024 report, mortgage interest rates sit at an average of 7.17%. Paying cash for a home can save you money in the long run, since you don’t have to pay elevated interest rates or go through the hassle of refinancing every couple of years when a lower interest rate presents itself.
• Tax implications: Although the buyer may not be eligible for as many tax write-offs as they might be in a mortgaged home purchase, the seller is actually the one taxed on a cash purchase if they made a net gain on the sale.

Buying a home for cash can save you money in the short term and the long term. Before you decide whether to proceed with a cash purchase, talk to your real estate agent to make sure you’re making the right offer for the right home to fit your needs!

Compare your options with an all-cash offer

If you need to sell your home in a matter of days, not months, HomeLight can provide you with an all-cash offer through our online Simple Sale platform. Tell us a bit of information and we’ll provide you with a no-obligation cash offer in as little as 24 hours. It’s quick, easy, and can reduce the stress of a home sale.

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Cash offers help both sellers and buyers

A cash offer provides fantastic benefits to both sellers and buyers. A home transaction can be a stressful experience for both the buyer and the seller. Buying or selling for cash can reduce the stress on both sides of the transaction. So if you’re putting your home on the market or starting to look for your next dwelling, keep your mind open to a quick and easy cash sale!

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