The Pros and Cons of Making an All-Cash Offer on A House
Making an all-cash offer could be your best (or worst) homebuying decision. Weigh these pros and cons carefully, and make the move that’s right for you.
Real estate purchases made entirely with cash are rumored to create big benefits for homebuyers. But making an all-cash offer on a house isn’t always a no-brainer. There are actually some pretty compelling reasons why you might not want to offer all cash on a house.
With the help of Brad Graves, a top real estate agent in San Antonio, Texas, and some recent national home purchase data, we’ll examine the pros and cons of all-cash offers. We’ll also uncover some ways you can take advantage of all the pros and none of the cons of an all-cash offer. If you’re a first-time homebuyer — whether you can make an all-cash offer or not — here is what you need to know.
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What is an all-cash offer?
According to 2024 data from the National Association of Realtors, 26% of all buyers purchased their home with cash. As the name implies, an all-cash offer means that you, personally, have all the money needed to purchase the house. You won’t literally be paying in hundred-dollar bills, but with an all-cash offer, you must have the funds to purchase the home available in a liquid account, meaning an account that allows immediate withdrawals and transfers. For most people, this means a checking, savings, or money market account.
To be clear, an all-cash offer means you won’t be getting a mortgage loan for any portion of the sale. This is important: if your real estate agent puts in an all-cash offer on your behalf, they will not include a financing contingency. The seller makes decisions based on the terms of your offer, including contingencies. So, in many cases, making an all-cash offer means you won’t even attempt to obtain financing at all. (No changing your mind after the offer is accepted!)
Graves points out that other contingencies are also optional with an all-cash offer. These could include:
- The appraisal contingency: Lenders require an appraisal, but if you are paying cash and you’re confident that the price is fair, you don’t need one. This can save you between $300 and $450.
- The inspection contingency: As a cash buyer, an inspection contingency is optional. (However, inspections are still highly encouraged and only cost around $343 on average.)
- The sales contingency: A sales contingency means your current house must sell before you close on this new house. This is the opposite of liquidity, so usually all-cash offers do not contain a sales contingency. Including a sales contingency is not impossible, but it negates the attractiveness of an all-cash offer to a seller.
