In the real estate market, there are definite and obvious advantages to paying for your new home with an all-cash offer. When the buyer produces the entire purchase price upfront—rather than from a lender—the seller knows that the buyer has the necessary funds to complete the transaction without the uncertainty that comes with other payment methods. 


Surprisingly, 29% of home buyers pay for their home with an all-cash offer.  And, often, these people aren’t filthy rich! Usually they are retirees with savings, or are individuals with enough equity in their homes and other investments to produce the cash necessary for purchase.


While an all-cash offer has its advantages, there are times when it’s not in your best interest.  So when should you make an all-cash offer? 


DO make the offer if

  • You are in a tough seller’s market
  • You need a stronger negotiation stance
  • You are looking to close quickly
  • You’re looking to save on closing cost and loan interest
  • You really don’t like paying a mortgage

DO NOT make the offer if

  • You’re not diversifying your portfolio—don’t put all your eggs in one basket
  • You want the tax deduction that comes with a mortgage 
  • There are other investments you’d like to pursue


If you choose to follow through with the all-cash offer, listen to these tips to save you some potential heartache. For one, be sure you know exactly how much you have to spend (rather than guesstimating your total based on inheritance, cash gifts, and personal savings). Second, be ready to provide proof of funds. Next, do not forget other home-buying expenses like property tax, insurance, HOA fees, and inspections. Last but not least, don’t drain your savings. Emptying the coffers just to extend a cash offer isn’t a good idea, because you’ll need that plump savings account should you find yourself in a bind.


That said, The Bell Team is more than happy to help you through extending an all-cash offer, or anything else that can (and will) arise during the home buying process. We’ve seen a thing or two and have the know-how to help you through whatever comes up.


Have you extended an all-cash offer? Leave a comment below and get in on the conversation.