How to make a traditional cash offer on a home

Symbolic house made from one hundred dollars isolated on white background

And what are the advantages when buying a home today?

You know what they say: cash is king. 

Even today, as competition for homebuying cools down because of rising mortgage rates, most homes still receive more than one offer. 

If you can offer a traditional cash offer, you’ll have that all-important competitive advantage. 

While making a traditional cash offer is less complicated than going through major financing, it is not always as simple as it sounds. 

In this article, I’ll break down what a traditional cash offer is, how to use it, and how to make one—even if you don’t have all the cash right now. 

A Flyhomes Cash Offer is different from a traditional cash offer and can help you make a cash offer even if you don’t have all the funds up front. Learn more about the Flyhomes Cash Offer with a Flyhomes Agent.

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What is a traditional cash offer? 

A traditional cash offer is when you offer to buy a listed property in cash upfront, instead of with a mortgage loan. 

It can be a very straightforward process: you find a home you want and give the seller the entire purchase price for it using your personal funds. 

This doesn’t mean that you actually exchange cold, hard cash on the spot. 

The transaction is still handled through real estate agents and is completed through wire transfer and escrow. 

How a traditional cash offer works

When you make a traditional cash offer, you still have to go through the formal process of agreeing on the price and terms outlined in the home’s purchase agreement

Be prepared to prove you have enough liquid cash to cover the purchase by providing bank statements or a letter from your bank. 

And just like with a traditional, financed offer, you’ll have to make an earnest money deposit to show the seller you are serious about buying the home. 

Once your traditional cash offer is accepted, you’ll transfer the money to a title company via cashier’s check or wire transfer. Then, on closing day, the seller receives the money and you get your keys! 

A traditional cash offer doesn’t erase the other important steps that protect you and the seller from entering into a flawed agreement. 

You will still have until the closing day to check the title on the house, do an inspection, and clear any contingencies in the contract. 

assorted color wall paint house photo
Making a cash offer shows the seller that you have the funds available to close on the home sooner than if you needed financing

Why do sellers like traditional cash offers? 

If you were selling a house, wouldn’t you want your money as quickly as possible with minimal hassle? Of course, you would! And a traditional cash offer does just this for a seller. 

If a buyer does not have to rely on a loan, there is less chance that the funds will fall through. 

Plus, if the money comes directly from the buyer, there isn’t a third party involved to slow the process down. 

Traditional cash offers can close faster

Traditional financing offers usually take between 30-60 days to close, and can even take up to three months if there are title issues or other concerns. Whether you are making a traditional cash offer or a financed offer, it will take some time to check the title, purchase insurance, and complete inspections (if you opted for one). 

But you can still close a traditional cash offer in a matter of days since you don’t have to wait for a lender’s underwriting and mortgage approval process because the cash is already there. 

Traditional cash offers are more certainty

If you already have the cash, there are fewer loose ends to tie up before the closing day. When you make an offer using mortgage financing, your funding is not necessarily guaranteed until the mortgage is underwritten and the transaction is closed. 

So, even after you’ve deposited earnest money and have closing costs covered, there is still a chance you will not be able to secure financing before closing day and the seller will have to start over. 

Once you provide proof that you have the funds for a traditional cash offer, that’s one less thing the seller has to worry about. 

Traditional cash offers avoid contingencies

Some purchase agreements include a financing contingency which may give the buyer the ability to back out of the purchase if they don’t, ultimately, get approved for a mortgage, but this depends on the specific contract. 

But with a traditional cash offer, you won’t need this contingency when there is no financing. 

The fewer the contingencies, the more competitive the offer because that’s one less thing either the buyer or seller has to worry about. 

How to make a traditional cash offer

While you may not be handing over a bundle full of dollar bills to make a traditional cash offer, the process is almost as simple as that. 

The only difference is that you’ll transfer your own funds electronically or provide good funds to the closing agent (such as a cashier’s check) into a third-party escrow account prior to closing on the home. 

Here’s how a traditional cash offer works:  

  1. Find your next home and make an all-cash offer.
  2. Prove you have access to liquid funds by providing bank statements or a letter from your bank or investor. 
  3. Move the earnest money into escrow—your agent will accept it first, then move it to the closing agent, who then makes the deposit.
  4. Work with your real estate agent to do inspections and clear other contingencies in the purchase agreement, if needed. 
  5. Move your funds into the closing agent’s  escrow account via wire transfer or cashier’s check, when requested to do so by the closing agent. 
  6. Close on the home and move in! 

Making a traditional cash offer can help you stay ahead of the homebuying competition

The real estate market can be highly competitive, but one way to stand out to sellers is to make a traditional cash offer. 

Once you prove you have the liquid funds available for closing on your new home, you will need to wire the funds to the closing agent befoe closing on your new home. 

From there, it could take as little as ten days to close on your new home. 

Because the buyer will need to have liquid funds to make a cash offer, a traditional cash offer is not for everyone. Still, it is an important and powerful tool for a homebuyer to use in a rapidly changing and highly-competitive real estate market. 

A Flyhomes Cash Offer can make you a cash buyer without having the cash upfront, and is different then a traditional cash offer. Learn how it works at https://www.flyhomes.com/buy for more information.

Flyhomes Mortgage, LLC. 

NMLS ID #1733272

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