What is a cash offer in real estate and why consider it?

Cash offers—where a buyer pays the full purchase price without a mortgage—now account for nearly 39% of all home sales, the highest share in over a decade. What was once the domain of wealthy investors has become a mainstream strategy that's reshaping how homes change hands across the country.

This guide walks you through what cash offers are, why they've surged in popularity, how the process works from start to finish, and what both buyers and sellers gain—or give up—when they skip traditional financing.

What is a cash offer in real estate?

A cash offer means a buyer purchases a property by paying the full sale price upfront without taking out a mortgage. Instead of applying for a loan, the buyer provides proof of funds—a bank statement or letter showing they have the money ready—and then transfers the payment at closing through a wire or cashier's check.

Here's what makes this different from a typical home purchase. When someone buys with financing, the deal includes a financing contingency, which is a clause that protects the buyer if their loan falls through. With cash, that contingency disappears. The seller doesn't have to worry about the buyer's loan getting denied or delayed, and the transaction moves faster as a result.

You might be surprised by how common this has become. Nearly 39% of all single-family home and condo sales in 2024 were cash transactions—the highest share since 2013. That's roughly one in every three homes sold.

Why cash offers are surging in today's market

Several forces are driving more buyers toward cash purchases. The shift isn't just about having money available—it's about strategy and timing in a competitive landscape.

Record share of cash home sales

Cash buyers have become a major presence in residential real estate over the past few years. While the exact percentage changes month to month, the overall trend is clear: more people are finding ways to buy without traditional financing.

Some buyers have built up substantial equity from selling a previous home. Others are tapping retirement accounts or inheritances to gain an edge in bidding wars.

Low inventory and competitive bidding

When housing supply is tight—though inventory grew 23.5% annually as of spring—and multiple buyers compete for the same property, sellers naturally prefer offers that close quickly and carry less risk. A cash offer stands out because it signals certainty.

Buyers using financing face appraisal requirements, underwriting reviews, and the possibility of loan denial. Cash buyers skip all of that, which makes them far more appealing when a seller is choosing between five or six competing bids.

Investor and iBuyer expansion

Real estate investors and instant-offer platforms—often called iBuyers—have contributed significantly to the rise in cash transactions, with investors paying all cash at nearly double the rate of overall cash sales. Investors buy properties to renovate and resell or to rent out for ongoing income. iBuyers use technology and data to make offers within hours or days.

Opendoor pioneered this model in 2014, allowing homeowners to request an offer online, choose their closing date, and sell without showings or open houses. This approach expanded the pool of cash buyers beyond wealthy individuals to include technology-driven companies serving everyday homeowners.

How a cash offer works from quote to close

The cash offer process is simpler than a traditional financed sale, but it still follows a clear sequence. Each step builds on the last, and the entire timeline is usually much shorter.

1. Submit property details online

You start by providing information about your home—address, square footage, condition, and any recent upgrades. Many cash buyers, including instant-offer platforms, generate preliminary offers based on this initial data.

2. Receive and review the cash offer

Within hours or days, you'll get a formal offer outlining the purchase price, proposed closing date, and any conditions. You'll have time to review the terms and decide whether to accept, counter, or decline.

3. Schedule a home assessment

Most cash buyers conduct a property inspection to verify the home's condition and identify any needed repairs. This assessment helps finalize the offer price and confirms what's being sold. Unlike a traditional appraisal—which a lender orders to confirm the home's value matches the loan amount—this inspection focuses on the property's actual condition.

4. Sign the purchase agreement

Once you accept the offer, you sign a purchase agreement that locks in the terms. At this point, the buyer typically provides proof of funds to confirm they have the cash available to complete the purchase.

5. Clear title and escrow

A title company researches the property's ownership history to confirm there are no liens, disputes, or legal issues that could prevent the sale. The buyer deposits funds into an escrow account, where they're held securely until closing. Escrow acts as a neutral third party that protects both buyer and seller during the transaction.

6. Close and get paid

On closing day, you sign the deed transferring ownership, and the buyer's funds are released from escrow to you. Without mortgage underwriting or lender approvals, cash closings often happen in as little as one to two weeks—sometimes even faster.

Get a free, no-obligation cash offer for your home

Cash offer vs mortgage offer key differences

Cash and financed offers differ in ways that affect both the buyer's strategy and the seller's confidence. Here's what sets them apart.

Speed to close

Cash transactions typically close in seven to 14 days, while mortgage-backed purchases take an average of 41 days according to ICE Mortgage Technology. The difference comes down to loan processing—underwriting, appraisal scheduling, and final approval all take time that cash buyers simply skip.

Financing risk

A cash buyer eliminates the possibility of loan denial, which is the most common reason traditional sales fall through. Sellers don't have to worry about the buyer's credit score, debt-to-income ratio, or last-minute financing complications that could derail the deal.

Repairs and concessions

Cash buyers often have more negotiating power when it comes to property condition. They may request fewer repairs or offer to buy the home as-is, which can be a relief if you don't want to invest time and money into updates before selling.

Net proceeds and fees

While cash buyers avoid lender fees and mortgage insurance, they still pay for title insurance, escrow services, and transfer taxes. Sellers benefit from fewer contingencies, though the final sale price may be slightly lower than a financed offer to account for the speed and certainty.

Who makes cash offers on homes

Cash offers come from a diverse mix of buyers, each with different motivations and approaches. Knowing who's behind the offer helps you understand what to expect.

Individual buyers

Some homeowners have enough liquid assets—from savings, investments, or the sale of a previous home—to purchase without financing. These buyers often want to avoid the hassle of mortgage applications or prefer to own their home outright from day one.

Real estate investors

Investors purchase properties to renovate and resell—known as flipping—or to rent out for ongoing income. They typically move fast, buy homes in any condition, and focus on properties where they can add value and turn a profit.

Instant offer platforms like Opendoor

Technology-driven companies use algorithms and local market data to generate competitive cash offers within minutes. Opendoor's platform allows homeowners to request an offer online, see a transparent breakdown of the price, and choose their own closing date. This model combines the speed of a cash sale with flexibility that traditional buyers can't always provide.

Benefits and trade-offs for home sellers

Cash offers deliver clear advantages, but they also come with considerations that vary depending on your situation and priorities.

Certainty of close

The biggest advantage is confidence that the sale will actually happen. Without financing contingencies, there's far less risk of the deal falling apart at the last minute due to appraisal issues or loan denial.

Flexible timeline

Many cash buyers, especially instant-offer platforms, let you choose your closing date. If you're coordinating a move, managing a job relocation, or waiting for your next home to be ready, this flexibility can make all the difference.

Potential price gap

Cash offers may come in slightly lower than what you'd receive on the open market, particularly if you're selling to an investor or iBuyer. The trade-off is speed and convenience—you're essentially exchanging a potentially higher price for certainty and a faster timeline.

Benefits and trade-offs for buyers using cash

Buyers who can make cash offers gain significant advantages, but they also tie up substantial capital and forgo certain financial options.

Stronger negotiating power

In competitive markets, cash offers win. Sellers know these transactions close faster and carry less risk, which often means your offer gets accepted even if it's not the highest bid on the table.

Appraisal not required

Without a lender involved, you can skip the appraisal—a step that sometimes derails financed offers when the property doesn't appraise for the purchase price. This gives you more flexibility to pay what you believe the home is worth.

Tied up liquidity

Paying cash means locking a large sum of money into a single asset. You'll lose the opportunity to invest that capital elsewhere or to leverage low interest rates through a mortgage that could cost less than what you'd earn on other investments.

How companies calculate a cash offer for my home

If you're considering an instant cash offer, you might wonder how the price is determined. The process is more transparent than you might think, and it's built on a few key factors.

• Recent comparable sales: Cash buyers analyze recent sales of similar homes in your neighborhood—often called "comps"—to establish a baseline market value. They look at square footage, age, condition, and features to find the closest matches.

• Home condition adjustments: After reviewing your home's condition, buyers adjust the offer to account for any needed repairs or updates. A home that's move-in ready will typically receive a higher offer than one requiring significant work.

• Market trend forecasts: Buyers factor in whether your local market is appreciating, stable, or cooling. If prices are rising, the offer may reflect that upward momentum. If the market is softening, the offer will be more conservative.

• Service fees and repair costs: Instant-offer companies typically build their service fees and estimated repair costs into the offer price. This transparency means you know upfront what you'll net at closing, with no surprises or hidden deductions.

Tips to compare multiple cash offer services

Not all cash buyers operate the same way. If you're evaluating multiple offers, here's what to focus on.

Verify proof of funds and fees

Ask for documentation showing the buyer has the cash available to close. Also, request a detailed breakdown of any fees or costs you'll be responsible for—some companies charge service fees, while others don't.

Review repair deduction policies

Find out how each buyer handles repairs. Some offer a firm price regardless of condition, while others adjust the offer after an inspection. Knowing this upfront helps you avoid surprises later.

Ask about backup listing options

Some instant-offer platforms give you the option to list your home traditionally if you're not satisfied with the cash offer. This flexibility lets you explore both paths without committing upfront, giving you more control over the outcome.

Next steps get your free Opendoor cash offer

If a cash offer sounds like the right fit for your situation, the process is straightforward. Opendoor lets you request a free, no-obligation offer online in minutes. You'll see a competitive price based on your home's details and local market data, and you can choose your closing date to match your timeline.

There's no pressure to accept, no showings to schedule, and no fees until you decide to move forward.

Get your free cash offer today

FAQs about cash offers in real estate

Do sellers pay capital gains taxes differently with an all cash offer?

Tax treatment depends on how long you've owned the home and how much profit you make—not on whether the buyer pays cash or uses financing. If you've lived in the home for at least two of the past five years, you may qualify for a capital gains exclusion. It's always wise to consult a tax professional for advice specific to your situation.

What paperwork should I gather before requesting a cash offer for my home?

Having your property deed, recent tax assessment, and any records of major repairs or upgrades can help streamline the process. That said, most cash offer companies handle title research and property verification independently, so you don't need to gather extensive documentation upfront.

Can I stay in my house after closing with a rent back agreement?

Many cash buyers offer flexible closing terms, including temporary rent-back arrangements that let you stay in the home for a few days or weeks after closing. This option is particularly helpful if you're coordinating a move or waiting for your next home to be ready. Terms vary by buyer, so it's worth asking about this possibility when reviewing your offer.

This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.