Cash Offer

· 2 min read
A cash offer means the buyer is paying for your home without a mortgage — no lender, no appraisal contingency, no risk of financing falling…

A cash offer means the buyer is paying for your home without a mortgage — no lender, no appraisal contingency, no risk of financing falling through at the last minute. For sellers, that certainty is worth its weight in gold.

Why Cash Offers Are Attractive

Mortgage-backed deals fall apart roughly 20% of the time before closing. The appraisal comes in low, the buyer’s credit situation changes, the lender finds an issue — dozens of things can kill a financed deal. Cash eliminates all of that.

Cash deals also close faster. Without a lender requiring 30-45 days of underwriting, title work, and documentation, cash sales can close in as little as 7-14 days. That speed is valuable if you’ve already bought your next home or need to relocate quickly.

The Price Trade-off

Cash buyers know their offer is more attractive, so they typically bid 5-10% below market value. On a $400,000 home, that’s $20,000-$40,000 less than a financed offer might bring.

But the math isn’t always that simple. If a financed offer falls through, you’re back on the market for another 30-60 days, paying your mortgage, insurance, and taxes. A slightly lower cash offer that closes in two weeks might net you more after carrying costs.

Proof of Funds

Any cash buyer should provide proof of funds — a bank statement, investment account statement, or letter from their financial institution showing they actually have the money. Never accept a cash offer without verifying funds. Scammers and tire-kickers waste sellers’ time with fake cash offers.

A legitimate proof of funds letter will be recent (within 30 days) and show liquid assets equal to or greater than the offer price.

Evaluating Cash vs. Financed Offers

Don’t automatically take a lower cash offer over a higher financed one. Consider the buyer’s earnest money deposit, contingencies, closing timeline, and the strength of their lender’s pre-approval. A well-qualified conventional buyer with 20% down is nearly as safe as cash.

Compare net proceeds from different offer types using the net proceeds calculator. The selling guide has more on evaluating and negotiating competing offers.