If you're considering selling your home, you might have encountered the term “all-cash offer.” Or maybe, as you’re driving around town or scrolling online, you’ve seen advertisements from businesses that say they “buy homes for cash.” What does it mean?
A cash offer is when a potential buyer offers to pay for the entire cost of the house without using a mortgage loan or other financing. According to the National Association of Realtors, in January 2024, all cash buyers now stand at 32% of home sales. The last time the share of all cash buyers was this high was June 2014.
Selling your house “for cash” doesn’t mean you’re trading it for a briefcase full of hundred-dollar bills, like in the movies. Rather, a buyer who makes an all-cash offer has enough liquid funds to cover the full price upfront. Instead of financing the purchase with a mortgage loan, the buyer will simply pay you directly (through a title and escrow office), just as if they were buying anything else.
Accepting an all-cash offer can speed up the process significantly since you don’t have to wait on lender underwriting and approval. Plus, all-cash offers are less likely to fall through, since your buyer isn’t relying on a loan application that could be denied.
Underwriting a mortgage is one of the lengthiest steps in the timeline of buying a house. It can take 30 to 60 days, or longer. And there’s always the chance that some change in the buyer’s finances since pre-approval will cause the lender to deny them the loan. Without the mortgage underwriting process, sellers save time and avoid any risk.
Although it’s not quite as complicated as getting approved for a mortgage, cash buyers still need a financial institution’s help to make their offer stick. Cash buyers must show the seller some kind of proof of funds, like a bank statement or certified financial statement. Then the seller can rest easy knowing the buyer has the necessary cash for the sale.
Cash closings can take as little as a week or two. “The biggest pro of selling your home for cash is the speed at which it can be done,” says Jeff Shipwash, founder and CEO of Shipwash Properties in Knoxville, Tennessee. “Homes sold for cash can be completed as quickly as the title company can process the paperwork.”
How does the home-buying process differ from cash offers?:
Contingencies: There are usually fewer contingencies with cash sales. Buyers don’t need the financing contingency (that’s for mortgage loans), and there may be no need for a sale contingency either. Some buyers may still want an inspection contingency.
Appraisal: Appraisals are typically lender-mandated, so without a lender, a seller usually won’t have to worry about them. There are some cases in which a buyer may still want an appraisal, though - especially if they’re an investor looking to guarantee returns.
Closing: The closing process on a cash offer is much more simple. The buyer signs the settlement statement, title, and deed, hands over a cashier’s check (or wire the money), and receives the keys. Without financing in tow, the paperwork is reduced significantly. Closing costs are also lower since there aren’t any lender fees attached.
Title & escrow: For the buyer and seller a title and escrow company are still needed to handle the transaction, but you may have more leeway in choosing these parties without a lender involved. Shopping around will help you compare fees.
No need to do repairs or home staging
Selling the traditional way requires deep cleaning, decluttering, repairing, and even renovating, as well as staging your home. Not to mention that you have to keep your home clean throughout showings and open houses. This can be the most time-consuming, expensive, and stressful process of selling. Accepting a cash offer means you can sell your home as-is since these buyers typically won’t require any repairs or updates to be made. Most of them are planning on doing the renovation themselves, saving you from putting money into a property you’re just trying to sell.
No Realtor fees or commissions to pay. You can potentially save thousands of dollars in Realtor fees by going with a cash offer.
The types of buyers most likely to make an all-cash offer:
Home flippers: Experienced investors who regularly renovate and sell homes for profit, who are less likely to require contingencies.
Buy-and-hold rental investors: Experienced investors who purchase properties to convert to rentals, who are also less likely to require contingencies.
“We Buy Houses” groups: These house-buying companies have gained popularity in recent years, typically offering less than market value but providing remarkable speed to close a sale with no contingencies.
iBuyers: These tech-focused all-cash buyers are national online real estate companies that use algorithms to calculate an offer for your home. They typically pay more than “We Buy Houses” companies.
Wealthy buyers or retirees: Buyers with enough money to purchase a second home and/or dabble in real estate investment. Since these are often first-time all-cash buyers, they are more likely to ask for some contingencies.
Equity-rich homeowners: Homeowners who have converted equity to cash by selling their previous home. Again, these are typically first-time, all-cash buyers likely to request some contingencies.
Reasons to consider selling your house for cash
You think it's the best offer for your situation.
You’ve inherited a home and don’t have the resources to either maintain it or turn it into a rental property.
You need to relocate quickly and need the money or your home’s equity to make a down payment.
Homes with large amounts of past due taxes, fees, or liens
Burned-out or storm-damaged homes
Properties with illegal conversions or code violations
Homes requiring major repairs
Divorce
Bankruptcy
Foreclosure
Downsizing
Underwater on mortgage
Frustrating tenants
Structural damage
Big and Small Properties is a group of real estate Investors who buy houses and land all over the United States. They specialize in buying, wholesaling, and flipping single, multi-family, and commercial properties. They are CASH BUYERS creating a quick and easy selling process that moves with ease and efficiency from Offer to Closing. Big and Small Properties also partners with other experienced real estate Investors in buying property and can provide you a no-obligation Cash Offer TODAY. Contact (877) 260-5566 for your free no-obligation Cash Offer.
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