Skip to main content

Whether you have saved up a large sum of cash to purchase a home, or have built up equity in your current home to downsize to a cash property, it is possible to buy a house for cash.

Buying a property with cash makes the process of buying and selling a lot faster. Purchasing a property without the need for a mortgage will save you the time of finding a mortgage lender and being approved, not to mention it will save you having to pay off years worth of mortgage payments and interest.

Keep reading to discover more about how you can buy, or sell, a house for cash and what the advantages and disadvantages are for doing so.


How Do You Buy a House with Cash?

When purchasing a house with cash, the first step is to save up the money and have it all in one place. If your cash is tied up in multiple assets or tucked away in multiple places, it can slow down the prices. You will want to gather your money together and make sure that it is all in one account. Before cashing everything out, it might be advisable to talk to a financial advisor or tax professional so that you understand all the implications of liquidating your accounts.

Once you have decided where the money is coming from, you will need to have proof of funds from the bank. This means that when you put down a cash offer, you will have a letter to support the fact that you have available funds. Doing this gives your offer more credibility. Also, doing this rather than providing a bank statement saves you from sharing any sensitive information.


What House Can I Buy with Cash?

The next stage of the process involves finding your ideal house. There are many different ways to do this – you can look on online marketplaces or work with a local estate agent who can help you find a property which matches your specifications. Your estate agent can also help advise you about fair asking prices and how to negotiate.

As you are looking at different houses, think about it in the long-term – not just what works for you and your lifestyle now, but what you are looking for in the future. Consider what things can be easily fixed, small home improvements such as paint or new appliances, versus what is something inherent to the property like the structure or the amount of light.

Consider the location of the home. If the home is in a bad neighbourhood, you may have trouble selling it in the future and your experience living in the home might be spoiled.

If you have enough cash, you can buy any type of property. Just because you are a paying in cash doesn’t mean you shouldn’t shop around for the best offer or settle for less than best!


What are the Benefits of Buying a House with Cash?

There are many advantages to buying with cash. Find some of the benefits below:

  • Cheaper – When you pay for a home with cash, you do not need to pay any interest fees on a mortgage or any closing costs.
  • Faster – Without the need to be approved for a mortgage, the process is typically much quicker meaning that sellers can sell their house faster.
  • More Reliable – Buying with cash is more attractive to sellers as there is no need to wait for a mortgage or risk the chance of having to pull out due to financing being denied.
  • Room for Negotiation – Cash buyers may able to get a slightly lower than asking price if they are paying by cash because its beneficial for the seller.
  • Own Your Home Outright – Paying upfront with cash means you won’t need a mortgage, and will own the house outright.
  • Avoid Long-Term Debt – As above, having the cash upfront means you won’t need to fall into long-term debt to invest in property.
  • Competitive Edge – As a cash-buyer, you may be a more attractive buyer than those with mortgages as you’re not reliant on an application to go through (so no property chains).
  • Simpler Process – When closing on a property purchased with cash, it is typically simpler than working with a mortgage as there is less need to track documentation.


What are the Drawbacks of Buying a House with Cash?

On the other hand, there are some possible disadvantages to consider if buying a house with cash. For example:

  • Less Investment Opportunity – A mortgage allows people to invest in other assets, such as other properties, so using cash may limit you. Speak to a financial advisor about this.
  • Less Liquid Cash on Hand
  • Risk of Financial Stress – If you want to buy a house with cash, you must consider if you can afford to do so long-term. You will need to have plenty left over afterwards for other expenses.


How Long Does It Take to Buy a House with Cash?

Cash sales can be relatively quicker, and may only take a matter of a few weeks for the sale to be completed. Mortgage applications are especially known for how long they take, usually around 1 month or more. What’s more, having cash means you’re a more attractive buyer. Sellers that want to move out quickly, and avoid sales falling through, will likely accept cash-buyers quickly.

Nonetheless, having cash doesn’t mean you will find a house quicker – as it’ll depend on your personal requirements, as well as how quickly the seller wants to move out, what kind of buyer they’re interested in and lots more.