5 Advantages of a Cash Home Purchase

Cash home purchase concept

Whether you are buying a home for personal use or dealing in real estate purchases as an investor (to flip or hold as a rental unit), there are many benefits to a cash home purchase. The more cash you are able to apply toward the sale, the better. An all-cash home purchase will present the ideal situation for both you and the seller.

Here are 5 advantages of a cash home purchase, according to the PropertyLark network of home buyers:

1. Faster Closing

Cash home sales can be completed much faster than traditional sales that rely on mortgage loan funding or other financing solutions. Buying a house with all cash is quick and easy. The closing can happen in a matter of days or weeks rather than taking a month (or more) for the escrow process and closing stages. You aren’t waiting on a mortgage lender to approve your loan or depending on equity from another home sale to fund your purchase. This ensures the deal can get done quickly.

2. Fewer Complications

As mentioned above, there is no mortgage lender funding to wait on and you’ll generally want to present a cash offer without any complicated contingencies. Keep it simple and the transaction will be easy to complete. This is a benefit for the home buyer and the home seller, especially if they are motivated to sell as soon as possible.

3. More Buying Power

Home sellers love cash offers because of the quick closing and simplicity of the transaction. You present much less risk to them as a cash buyer. They don’t have to worry about your mortgage funding falling through or other complications that can arise during the closing process. You have cash in hand and are ready to take ownership of their property.

4. Lower Purchase Price

A cash offer may also allow you to buy the property at a lower price. The all-cash transaction will be appealing to many home sellers, especially if they are highly motivated to sell. They may be dealing with financial distress or be in a situation where they want or need to sell as quickly as possible. They are willing to accept less for a faster and easier closing. Even a traditional open-market home seller will be drawn to a cash sale because you are eliminating a lot of risk for them. They may be happy to accept a slightly lower price for your offer compared to a higher offer that has more complications and contingencies attached. Cash is always king in any real estate market conditions!

5. No Interest

A cash real estate transaction means you are not paying interest on a mortgage loan or other funding source. This will save you a lot of money over time. Even if you are funding part of the transaction with a mortgage, you will want to apply as much cash as you can afford toward your down payment. This will help reduce your interest rate and minimize the amount of interest you are paying over the life of the loan. An all-cash home purchase is the ideal option as you won’t be paying any interest and you’ll own the property outright from day one.

If you have the means to buy a house (or multiple investment properties) for cash, you will see these key benefits and more. There are so many advantages to cash home purchases. We’re just scratching the surface here!

For all your home buying and real estate investing needs, consider joining the PropertyLark network of home buyers. Click below to learn more or fill out the contact form on the right to see if you qualify.