How to Make a Cash Offer on a House

By Bill Lyons | Updated on February 2, 2024

If you are looking to forgo a traditional mortgage, it is possible to become a cash home buyer if you have the finances or credit score to do so. Whether you have proof of the funds in your bank account or you want to work with a financing company to make a cash offer on a house, there are benefits to becoming a cash buyer for homes.

To pay cash for a house, you will need to secure a mortgage pre-approval if you want to work with a financing company, or show proof of funds in the form of a letter from your bank or bank statement. Even if you don’t have the cash, you can purchase a house for cash by securing a mortgage through a financing company that will purchase the house for cash on your behalf.

Read on to learn more about how to make a cash offer on a house and why doing so can help you secure your dream home.

What Is a Cash Offer on a House?

A cash offer on a house is an offer to purchase a home using cash in the bank or from a financing company. A cash offer is faster, as there isn’t any mortgage paperwork to deal with. Closing costs are also minimal and the buyer isn’t going to have to pay mortgage interest over the years. For people with cash available, making a cash offer on a home makes sense. There is no need to choose what type of home loan to go with when you purchase the home for cash.

Why Make a Cash Offer on a House?

There are a number of reasons to make a cash offer on a house when the market is competitive. When you have the ability to pay cash for a house, or you can secure funds from a financing company, making a cash offer gives you more leverage than a buyer using a traditional mortgage or Non-QM loans would. It’s important to consider all of your options when you are trying to buy a home in a tough market.

Be a More Competitive Buyer

Sellers know that there can be snags with the financing when it comes to purchasing a home, and one offering cash is generally a better choice. If you have been trying to buy a home using a traditional mortgage, you might need to provide a letter of explanation if there are any questions regarding your finances. This can delay your mortgage, making a cash offer more competitive.

Lower Fees and Closing Costs

A cash offer on a house can reduce your fees and closing costs substantially. You don’t have to worry about paying your mortgage lender, and there’s no need for insurance because your down-payment isn’t large enough. When you have the cash to purchase a home, you can potentially save yourself thousands in fees and closing costs.

No Interest Payments Required

If you don’t have a mortgage, and pay cash for a home instead, you aren’t going to be wasting your money on interest payments every month. Remember that the majority of interest you pay on your mortgage is in the first years of the mortgage. If you want to keep the cost of your house down, pay cash for the home and avoid interest payments.

Streamline the Home Buying Process

The home buying process is often complicated due to contingencies and financing. When you want to be a competitive buyer, secure the cash you need to streamline the process of buying a home. Sellers are often more likely to go with a buyer who has cash available than one who has to wait for their financing to go through.

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How to Make a Cash Offer on a House

If you are interested in making a cash offer on a house, there are a number of steps you can take to make the process easy for you. Locate a real estate agent or attorney who has the experience you want when it comes to handling cash offers. Secure your funding if needed, and be prepared to make an offer on a home that you love right away.

Consider Working With a Real Estate Agent or Attorney

A real estate agent or attorney is going to know the local market, and be able to guide you in the process of making a cash offer on a house. Although you won’t need to worry about a mortgage, you will want to know that you are paying what a home is worth. Your real estate agent or attorney can help you negotiate the deal, and determine what a fair offer is for the home you are interested in.

Make an Offer on a Home

The first step to purchasing a home for cash is to make an offer to the seller. This is done in writing, and it’s best to have an attorney or real estate agent draft an offer for you so that nothing is left out.

You will want to look at comparable properties in the area to ensure that your offer makes sense. You don’t want to end up overpaying for a home because you didn’t look at other properties in the surrounding area. Your offer can be negotiated with the seller, but it is always a good idea to make a reasonable first offer to get the seller interested.

Provide Proof of Funds

You will need to show that you have the funds available to purchase the home you are interested in. You can show your bank statement, or get a letter from your bank that states how much money you have available for the purchase. Once you can show that you have enough money in the bank to pay for the purchase, you will be able to have your offer accepted by the seller.

Order a Home Inspection and Appraisal

A home inspection and appraisal may not be required to purchase a home for cash, but these are a good idea in order to protect your investment. You want to be sure that the home you are buying is worth the money, and that there are no surprises once you are the new owner of the home.

Once the home inspection is complete, you will know if there are any problems you want to address with the seller. You may be able to negotiate a lower purchase price if there is damage that wasn’t disclosed previously. The appraisal will allow you to know what your home is worth at the time of purchase, and show you if your offer is reasonable.

Close on Your New Home

Once you sign a purchase and sale agreement, you can open an escrow account in order to put the funds in the account once the sale goes through. Once the money is in the escrow account, you will have ownership of the home transferred to you by signing the deed. Paperwork will include a title report that indicates the home is now transferred to you.

This process is often handled by an attorney to ensure the proper transfer of the title and deed, and the process is recorded. You are the new owner of the home once all the paperwork is complete and escrow is funded.

Stand Out By Paying Cash for a Home

You can stand out above the crowd of buyers when you make a cash offer on a home. Griffin Funding offers products for you to choose from that make it possible for you to purchase a home for cash, and make the entire process easier.

At Griffin Funding, we have partnered with Orchard to make it possible for home buyers to purchase a home with an all-cash offer. By taking advantage of an all-cash offer program like the one we offer in partnership with Orchard, you can strengthen your offer in a competitive market and close on your home even faster.

Whether you have the cash in the bank to purchase a new home, or you secure funding from a financing company, your ability to pay cash for a home is going to speed up the buying process. Avoid the pitfalls that can come when you secure traditional funding, and work with a financing company if you need additional cash to purchase a home. Learn more about the benefits of making a cash offer on a house, and see how Griffin Funding can get you into your next home.

Bill Lyons

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.