Wait! Read This Before You Sell Your House for Cash

What does it mean to sell a house for cash?

When you sell a house for cash, it simply means that you sell to a buyer who can purchase the home outright without the use of a mortgage loan. If you agree to an offer of $350,000, your cash buyer will need to show proof that they have that $350,000 at the ready in a bank account or its equivalent.

This requires collaborating with a specialized type of buyer who often invests in off-market properties — homes that may require repairs or are otherwise available at a discounted price.

The proportion of cash buyers in the housing market is significant, according to the National Association of Realtors. In July 2024, 27% of home sales were made with cash. This strong cash presence is attributed to many buyers leveraging equity from previous home sales to avoid higher mortgage rates.

Even still, NAR reports that 80% of recent buyers financed their home purchase. So attracting a buyer who is willing and able to pay all cash remains a relatively uncommon occurrence.

To ensure a cash offer for your home, you’ll need to work with a house-buying company or individual investor with cash reserves.

After completing a few steps to evaluate the home and make a firm offer, the buyer will either write a check or wire the money via a secure electronic transfer for the full amount of their offer price at closing.

Cash investors typically pay anywhere from 50% to 70% of market value, while iBuyer companies might pay around 85%-95%, depending on the home and the local market.

With cash, it turns into an easy transaction where the seller doesn’t have to be stressed out. It just takes all that pressure off the seller.

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Reasons to sell a property for cash

Now that you know what it means to get cash for your home, is selling your house for cash a good idea?

“The value a cash buyer offers is convenience and speed,” says Will Holly, owner of Holly Nance Group, a boutique real estate investment firm in New Jersey. “You’ll avoid the time hurdle involved with back-and-forth negotiations with multiple buyers.”

“With cash, it turns into an easy transaction where the seller doesn’t have to be stressed out. It just takes all that pressure off the seller,” adds Mark Abdel, a top-performing real estate agent in Minneapolis who sells properties 62% faster than the average agent in his market.

Let’s review some of these benefits more in-depth.

1. Faster closing

When you sell a house for cash, you can get money for your home much faster, usually in a week or two, compared to a month-and-a-half with a non-cash buyer.

Mortgages are time-consuming. As of 2024, mortgages are taking an average of 43 days to complete from start to close. The lender will also require an appraisal to confirm the amount of funds they’re willing to provide, which can introduce additional delays.

All in all, with a cash offer from a house-buying company, you can often close the sale in as few as seven to 10 days. For sellers who need cash quickly, this is a huge advantage.

2. No repairs or home staging

According to a recent survey, nearly 70% of home buyers prefer a turnkey home that doesn’t require additional repairs or renovations. If your house needs work, it can be more challenging to find a traditional buyer.

When you sell your home for cash to a house-buying company, you can skip the repairs and other preparations typically required when selling on the open market.

Cash-for-homes companies often purchase homes as-is since they have the capital and expertise to update a house. This removes the repair burden from the seller’s shoulders.

A cash sale also means you won’t need to stage your home, worry about keeping it spotless for weeks, or disrupt your schedule for repeated showings.

3. Reduced closing fees

In addition to eliminating any repair and staging expenses, a cash offer can eliminate extra closing costs. Many home-buying companies cover these costs entirely for the seller, which can total about 9% to 10% of the sale price. (The most significant expense is typically the agent commission, averaging 3% to 6% of the sale.) These savings can offset a lower offer price. It’s crucial to consider all fees and expenses when deciding whether to sell your house for cash.

4. Smaller holding costs

So long as you own a house, you’re responsible for its holding costs (also known as carrying costs), which include utilities, taxes, insurance, maintenance, and other fees amounting to a decent chunk of change each month.

In a sluggish real estate market, Holly says it could take as long as six months to sell a house. This can cause delays upward of half a year to get the equity out of a home while the owner continues to cover the costs of heating, cooling, mowing the lawn, etc.

A cash offer provides more immediate relief from these ongoing costs. Plus, the longer your home sits on the market, the greater the likelihood of reducing the list price.

5. Peace of mind

Holly also points out the peace of mind and financial certainty that comes with a cash sale, especially for homeowners juggling life challenges. “Any home seller with any complexity to the sale is better off with a cash buyer,” he says.

Those complexities might include a death in the family, bills stacking up, or expensive repairs. A cash offer may come in lower, but it won’t hinge on your home appraising at a certain amount or the financing working out for your buyer. When you need cash now, a drawn-out sale can be a major stressor.

6. Interest rate immunity

As home shoppers face today’s higher interest rates, a buyer with cash in hand eliminates the uncertainty of getting a loan approved. Mortgage interest rates peaked in mid-October of 2023 and have been steadily declining ever since. However, rates are hovering around 6.49% (as of late August 2024), making it challenging for some prospective buyers to qualify for a home loan.

“A cash buyer is not susceptible to rate hikes,” Holly says. An increase in interest rates or a change in the buyer’s credit history or employment situation could cancel or delay a settlement just days before closing. “Contracts are falling out more often,” adds Holly about the current real estate market.

Without the added risk of a financing contingency, selling to a cash buyer is typically a simple, more certain process.

7. Flexibility

Whether you want to move next week or stay put for a couple of months, a cash sale generally gives you plenty of wiggle room. Sellers who work with a house-buying company often select a move-out date that works best for them.

What’s the process to sell a house for cash?

Working with a cash homebuyer differs from the traditional agent-assisted process in many ways. Below, we offer a side-by-side comparison followed by an infographic showing the steps to complete a cash sale.

Cash home sales vs. traditional home sales

Aspect of the sale	Selling house to a cash buyer	Listing with a real estate agent
Timeline	In as little as 7 days, or up to 30 days if the seller needs more time.	65 days (22 to get an offer, and another 43 days to close, on average).
Home prep and repairs	None. You skip the preparations, repairs, and staging.	Make necessary repairs, deep clean, declutter, landscape, and stage the home.
Showings	Typically no showings, though a cash buyer will collect information about the home and may request photos or video.	You’ll make your home available for 10 to 25 showings, on average.
Inspections	Many cash buyers will perform an inspection or onsite evaluation — it depends on whom you work with and how they operate. Even if you’re selling as-is, a home inspection could still be required.	May need to make repairs for the buyer or renegotiate the price.
Appraisal	House-buying companies and investors may or may not perform a traditional appraisal. This can depend on the onsite visit and the company’s evaluation process.	An independent appraisal will be required to close when your buyer is using a mortgage. This can take 6-20 days (11 is the median, according to NAR) and may require negotiations.
Title search	The cash buyer will require a title search to make sure that you can convey the property free and clear of any claims or judgments against the home.	Title issues must be resolved to close the sale. The property must be clear of claims such as mechanic’s liens, unpaid taxes, or boundary encroachments.
Financing contingency	None are present in a cash sale.	Mortgaged buyers often use a financing contingency that could hold up the deal if the loan doesn’t clear.
Closing costs	Many cash-for-homes companies will pay the closing costs.	About 1% to 3% of the sale price (on top of commission) including title insurance, escrow fees, and taxes.
Getting paid	When you sell a house, how do you get the money? It may only take a matter of weeks or even days for the cash buyer to wire funds to your bank account.	The time it takes for you to receive funds will depend on the buyer’s due diligence period and other steps you must clear before settlement, as required by the buyer’s lender. On average, it takes 43 days to close a traditional home sale.

Steps to complete a cash home sale

Who buys houses for cash?

You may be asking, “Can I sell my house to a bank?” Well, there might be better alternatives.

As a group, cash buyers or house-buying companies are individuals or entities that buy your house outright and usually in as-is condition, without the need for lender financing. In general, selling your home to a cash buyer allows you to skip the home prep, showings, and staging hassles and arrange a more flexible closing timeline to coordinate with the purchase of your next residence. However, not all cash buyers have the same business model. It’s a good idea to know who you’re contacting to request a cash offer for your home. To keep it simple, we’ve grouped these buyers into a few broader categories you’re likely to encounter.

>>Read more: Do I need a lawyer if I sell my house for cash?

How to find reputable cash buyers

One of the most convenient ways to find a reputable cash homebuyer anywhere in the U.S. is through a trusted platform like HomeLight’s Simple Sale.

Simple Sale provides you with a no-obligation all-cash offer sourced from the largest network of cash buyers in the country. Our partner investors have a wide range of investment strategies, including fix-and-flip and buy-and-hold.

To get started, tell us a few details about your home and when you need to sell. After collecting some information, we’ll provide you with a no-obligation, full cash offer in as little as a week, and you can close in as few as 10 days.

What are the downsides of selling for cash?

If what you’ve read so far has sold you on the idea of selling for cash, great! But it’s important to also understand the main drawback: the price you get from a cash buyer may be appreciably lower than what you’d get on the market.

House-buying companies typically pay less for your home to account for the money they’ll spend on repairs. They will perform a walkthrough of the property to see how much work it needs, which helps determine the amount they are willing to pay.

“The minimum return on investment varies depending on things like the market and the condition of the home, but typically we need at least a 10% return on a purchase to make it worth the risk,” Van Soest says.

When flipping a house, “everything has to look brand new after repairs,” Holly says. Sometimes, this involves gutting the entire house, while other times it’s just a cosmetic makeover. Turnaround time is typically about four months from the time he buys a home, makes renovations, and then sells it.

Depending on your situation, the lower offer price may not be a significant concern, or it could sway you toward a traditional listing. If you sell on the open market, you might leverage a better price as traditional buyers envision themselves living in your home. With cash buyers, there are generally no heartstrings to tug on — it’s strictly business.

To get a preliminary estimate of how much your home might be worth today, check out HomeLight’s Home Value Estimator. Answer a few questions about the home you’d like to sell, and we’ll use local housing market data to give you a ballpark value estimate in less than two minutes. A top real estate agent can also be a helpful resource in making your decision.

How much do cash home buyers pay?

Various house-buying companies and investors will offer different amounts for a home.

Depending on the condition, price point, and location, your house will be a more desirable purchase to certain cash buyers over others. Most real estate investors have a specific “buy box” they use with parameters as to which types of properties are most valuable to them. That means what your home is worth will vary, even among buyers who can pay instantly.

Flippers, for example, often use the 70% rule. According to this guideline, a flipper won’t pay more than 70% of the “after repair value” (ARV) of a home, which accounts for deductions to make repairs and renovations.

Unlike We Buy Houses flippers, iBuyers tend to pay closer to market value because they target newer homes in good condition. But they charge a service fee, about 5% of the sale price. In addition, you’ll likely have to pay closing costs of between 1% and 2% for escrow fees, title fees, and transfer taxes. After you accept the iBuyer’s offer, the company then inspects the home and subtracts the estimated cost of repairs from the final price.

Buy-and-hold investors fall somewhere in between flippers and iBuyers. They typically pay more than flippers but less than iBuyers, and aim to make between 8% to 12% on their investment when they sell, or 4% to 10% from rental income while they hold.

“The discounted price someone should expect for a cash sale varies significantly,” Van Soest says. “The cleaner the house, the better the neighborhood, and the fewer issues a house has, the more likely you’ll get an offer that’s closer to market value. The more problems the buyer has to deal with, the lower the offer will be.”

Are cash-for-homes companies legit?

In short, the answer is yes; there are many legitimate companies out there that purchase homes for cash, will provide you with a great experience, and are good on their word. However, we always recommend that you do your due diligence on any buyer before you provide sensitive information or sign a contract.

“Check that the house-buying company has a good track record of homes purchased,” Holly advises. He suggests looking at properties that the firm bought and sold in your neighborhood and examining public records to review its transaction history. In addition, request references of other home sellers who have sold to the investor or house-buying company, and give them a call to ask about their experiences.

Abdel cautions sellers to be wary of scams in which house-buying companies promise a certain price but then hit you with hidden fees that substantially slash your profit. Other steps to help ensure a company is legitimate include:

• Check their BBB rating: No matter what type of house-buying company you decide to work with, make sure it’s an accredited Better Business Bureau (BBB) member. Check for positive reviews and timely responses to complaints. HomeLight, which provides a cash offer for homes through our Simple Sale platform, is rated A+ and BBB accredited.
• Ask for proof of funds and adequate earnest money: “Ask for proof of funds such as a bank letter to make sure they have the money in their account,” Holly advises. An official proof of funds (POF) from the buyer’s bank verifies that they have adequate liquid assets to cover the purchase price and closing costs, as well as provide sufficient earnest money, the deposit that represents a buyer’s commitment to a sale.

Should I still use a real estate agent?

An established real estate agent will likely have the inside track on who’s who in the local cash-buyer market and can also help you avoid getting lowballed.

“A lot of agents that are experienced and have been in the business have a Rolodex of people that they can go to that they’ve worked with over time that are investors,” Abdel says, commenting on how top agents can help find cash buyers by pitching properties to their networks.

“There are a lot of investors that are reaching out directly to homeowners to try and buy their property with cash,” notes Brian Breeckner, a top-selling real estate agent based in Columbus, Ohio, who has helped investors build their portfolios. “To make sure a buyer is legitimate, or that they’re making a good offer based on the value of your home, you can always speak to an experienced local real estate agent and get their opinion.”

HomeLight can connect you to top-performing agents in your area who sell homes faster and for more money. We analyze more than 27 million transactions and thousands of reviews to determine which agents will best meet your needs. Whether you’re looking for a quick cash sale or to expand your buyer pool by putting your home on the market, you’ll receive your agent recommendations in just two minutes.

How long does it take for a cash buyer to close?

Getting over that final hurdle to close a traditional sale — making sure a buyer’s financing is in order — can be an ordeal. With the time to close a purchase loan averaging 43 days in today’s market, that’s about a month and a half of waiting.

Cash buyers, on the other hand, are a lot more agile. Typically, a company that buys homes for cash will show you proof of funds for the amount they’re willing to offer and can close in as little as a week to 10 days.

Should I sell my house for cash?

If speed, convenience, and certainty are your top priorities, then selling your house for cash can be the right choice for you. Abdel sums it up this way: “It’s an almost guaranteed sale where you go with the cash buyer, and you don’t have any contingencies.”

Without the risk of financing glitches delaying the sale or inspection issues prompting the buyer to renegotiate, selling your house to a cash buyer will get you to the closing table much faster and with fewer headaches. But unless you sell to a cash buyer who plans on living in the home, Abdel says you could be giving up 10% to 15%. However, the fast sale may be exactly what you need.

One thing is certain: Companies that buy homes for cash aren’t going anywhere. And they are becoming more popular with a variety of sellers, not just those in distress.

“In my opinion, iBuyers and other cash-buying companies will continue to become more mainstream,” Van Soest says. “Technology is making it easier and easier to sell a home virtually.” And, he adds, you may get a better price than you would expect if your house is in really good condition and in a desirable area.

Still on the fence? HomeLight’s Simple Sale platform offers a commitment-free way to test the waters. We partner with the largest network of cash buyers in the U.S. Just enter a few details about your home online, and we’ll provide you with a cash offer within a week. You can close the sale in as few as 10 days — no additional fees, agent commission, or prep work.

Writer Dorothy O’Donnell contributed to this story.

Header Image Source: (Will Porada/ Unsplash)