WHAT IS A CASH OFFER?

When making an offer on a home, a cash offer indicates that the buyer intends to pay in full for the property without taking out a mortgage. Instead, they pay cash or via wire transfer for the entire purchase price of the home. When a buyer makes an offer in cash, it simply signifies they want to pay in full with no financing necessary.

Keep in mind that just because you’re buying or selling with cash doesn’t mean you won’t have to pay closing expenses. While these expenses are typically reduced in a cash transaction compared to a more conventional sale, they are nonetheless obligatory.

How common are cash offers?
Cash offers are more common than you realize. Over 25% of single-family house and condominium sales in 2018 were cash, according to ATTOM Data Solutions. It’s substantially behind the 2011 cash offer peak (38%), but it’s higher than the pre-recession average (19%) from 2000 to 2007.

This number varies by city. Montgomery, Alabama (54%), Naples, Florida (53%), and Macon, Georgia (51%), according to the same ATTOM Data Solutions report, had the largest share of all-cash transactions in 2018.

Cash offers are more common in the following situations:

• Property investors or investment companies are interested.
• The buyer recently sold their property and has sale proceeds.
• The seller has approached the buyer about buying the residence.
• Buyers want to stand out in a crowded market.
• The home needs repairs but is a good fix-and-flip.