How Long Does It Take to Close On a House With Cash in 2024? Here’s Your Timeline
Why pay cash for a home? Mortgage interest is tax-deductible, and many homeowners appreciate the deduction. If you only pay cash for the down payment and take out a mortgage for the remainder of the purchase price, it keeps more money in your pocket. Despite this, there are benefits to a cash offer.
In a competitive market, paying cash could help you beat out other homebuyers. Sellers tend to prefer all-cash offers because those deals close more quickly. Byron Ford, an agent in New Bedford, Massachusetts, works with 76% more single-family homes than other agents in his area. Given the persistent low supply of homes on the market over the last few years and rising interest rates, he’s seen a sharp uptick in cash offers.
Even the more challenging market conditions of 2024, as described by top agents surveyed by HomeLight, haven’t significantly dimmed the appeal of cash offers. In fact, while the volume of real estate transactions has decreased and inventory has risen, inventory as a whole still remains relatively tight. As of May 2024, the National Association of Realtors (NAR) estimates a 3.7-month supply of unsold homes on the market (a 6-month supply is considered balanced).
That means the market remains fairly competitive, which is reflected in both consistently elevated home prices, despite the economic downturn, and the ongoing ubiquity of cash offers. The National Association of Realtors reported that the share of buyers making all-cash purchases surged to a decade high in January 2024, accounting for 32% of home sales.
Ford speculates that one reason cash is popular is that “you don’t have to go through the appraisal or the bank approval process — it’s cleaner.”
But other than reaching the closing table faster with cash, especially if you need to sell your house fast, another advantage to a cash offer is that it saves you money long-term, especially when buyers are facing higher interest rates.
Michael Simpkins, a real estate agent in Florida who’s worked with 69% more single-family homes than the average agent in Apollo Beach, says another advantage to paying cash over taking out a mortgage to buy a home is that you’ll save on closing costs. He estimates that on a $200,000 house, you could save between $5,000 and $6,000 in closing costs.
Paying cash saves you money, and you might need a place to live sooner rather than later. But just how long does it take to close on a house with cash, compared to a traditional loan?
Setting the standard
If you’re buying a house with a standard mortgage, closing takes about 43 days, according to data from ICE Mortgage Technology. Why does it take this long?
Buying a home is a large financial transaction with many legal ramifications. Everyone involved will need time to perform their due diligence. The bulk of the time, however, is consumed by loan underwriting and processing.
A cash buyer can skip everything related to a mortgage, from the home appraisal to income verification, which saves them a ton of time. But there are still some loose ends that the cash buyer should tie up before racing to the closing table.
